Cap on increases only brings ‘temporary respite’
OPERATORS intending to appeal their business’s new rateable value should proceed, despite the 12-month 12.5% cap on rates rises announced by finance secretary Derek Mackay late last month.
That’s the message from trade group chiefs, who say that while the year-long limit on increases in non-domestic rates bills for hospitality businesses is welcome, it only offers “temporary respite” for operators.
Bar owners, restaurateurs and hoteliers facing huge hikes in rateable values (final rateable values were due to be published as this issue of SLTN went to press following the release of draft rateable values late last year) are being encouraged to press ahead with appeals when the six-month appeal window opens on April 1 – the day new rateable values take effect.
Operators must lodge the appeal by September 30 and are required to pay the new level of rates until the appeals process is concluded.
Willie Macleod, executive director for Scotland at the British Hospitality Association (BHA), which, together with the Scottish Licensed Trade Association (SLTA) and Scottish Tourism Alliance (STA), continues to campaign on business rates, said the cap on rates rises will give “considerable reassurance to businesses from April 1 but only offers respite for a year”.
“It offers breathing space but we’re not out of the woods yet,” he told SLTN.
“The fact is final rateable values, which will be posted around the middle of March, will stand and if businesses are concerned about that they should appeal.
“Derek Mackay is only empowered to do anything budgetary on a year by year basis so we need to look at what will happen once the 12 months is up next April.
“Meanwhile, of course, the Barclay group is reviewing the whole business rates system and is due to report in July, in the middle of the recess, so it will be October, November or December before we see any parliamentary reaction to Barclay.
“Assuming Barclay makes recommendations for our industry and assuming the government agrees to make changes, if legislation is needed it’s not going to happen until after April 1, by which time the cap will have expired.
“If Barclay doesn’t make recommendations for our industry then our dialogue with the Scottish Government will continue.”
SLTA chief Paul Waterson said the trade group is “urging members in the strongest terms to continue to appeal new rateable values by September 30”.
“You can’t appeal after that and we obviously don’t know what will happen in years two and three or what will come out of Barclay in terms of the overall system,” said Waterson.
“We urge everyone who was going to appeal to continue with that.”
Gary Louttit, head of the hospitality and leisure department at Shepherd Chartered Surveyors, agreed that operators faced with increased rateable values should proceed with appeals.
“[The Barclay review group] recommendations are due in July,” he said.
“In the meantime, we would strongly advise that ratepayers in the hospitality sector take advice on their new rateable values from local experts in the field and press on with appeals against the new assessments on the basis that they will still face increases in year one, albeit not as high as expected, but that in years two to five they will face the full impact of these contentious increases if they don’t.”
