LICENSEES can expect to see their business rates bills increase this year, a surveyor has warned.
Martin Clarkson of Gerald Eve said the number of businesses benefiting from the Scottish Government’s 12.5% cap on business rates increases will fall “significantly” as the cap adds a further 12.5% (plus inflation) onto each year’s bill.
“There are some misconceptions around the operation of the cap,” said Clarkson.
“The much heralded 12.5% cap was before inflation. Allowing for the RPI increase, the cap on increases in net terms in 2017/18 was actually 14.75%.
“Misunderstood by many, including some experienced financial controllers, was that the cap would operate on an annual compound basis, and not simply freeze rates bills for five years at 14.75% above the 2016/17 levels.
“The cap actually operates on the basis of limiting the increase each and every year to 12.5% (plus inflation) of the previous year’s rates bill until the 2021/22 rates year.
“So in 2018/19 the cap effectively reset and was calculated at approximately 15.88% applied to the 2017/18 bill.”
Bills will also be affected by the increase of the Uniform Business Rate (UBR), which rises on April 1.
