The National Enterprise Network has warned that changes to the way shared workspaces are assessed for business rates risk imposing a heavier tax burden on providers and their tenants, raising concerns over the impact on small business formation.

The intervention follows emerging interpretations by the Valuation Office Agency that treat serviced and co-working offices as a single taxable unit, rather than multiple individually rated spaces. The shift would remove eligibility for Small Business Rates Relief for occupiers, transferring a higher overall liability to workspace operators.

Industry groups fear those costs will ultimately be passed on through higher fees, undermining the affordability that has made such spaces a key entry point for start-ups and sole traders.

The Network also highlighted the risk that the revised approach could be applied retrospectively to 2023, potentially leaving providers — many of them not-for-profit — exposed to unexpected liabilities. For organisations already operating on tight margins, this could translate into significant financial strain.

The warning comes amid wider pressures on enterprise support providers, including the loss of programmes funded by the European Regional Development Fund and the transition to the UK Shared Prosperity Fund, alongside ongoing uncertainty linked to local government reform.

Many managed workspace operators function less as commercial landlords than as community hubs, reinvesting income into services such as business mentoring, employment support and access to affordable premises. Collectively, they form part of the UK’s pipeline for new business creation and local economic development.

Alex Till, chair of the National Enterprise Network, said the changes risked penalising organisations that underpin local growth. “If government is serious about growth, it must protect, not undermine, the infrastructure that enables people to start and sustain businesses,” he said.

The greatest impact is expected to fall on early-stage entrepreneurs, including those moving out of unemployment, low-income founders and underrepresented groups, as well as communities with limited access to alternative support.

The Network has called for urgent clarification from government, urging policymakers to ensure that business rates policy does not disproportionately affect not-for-profit workspace providers. Without intervention, it warned, closures and service reductions could follow — weakening local economies and constraining opportunities for new businesses.