SCOTLAND’S recent non-domestic rates revaluations have underlined the importance of reforming the system.
That was the message from trade group UK Hospitality Scotland after the Scottish Government published figures on the most recent revaluation, which came into effect earlier this year.
A report from Scotland’s chief statistician had claimed that, despite total rateable values across Scotland increasing by £360 million, ‘shops, public houses, and restaurants saw a decrease in their overall rateable value’.
UK Hospitality Scotland said that claim ‘‘does not reflect the reality on the ground”.
“We’re hearing from hospitality businesses that their rateable values have increased by up to 50%, which makes the report from the chief statistician, that rateable values are decreasing, surprising,” said the organisation’s executive director, Leon Thompson.
“The report does not reflect the reality on the ground, as felt by many of our businesses. Instead, increased business rates are reducing the ability of businesses to invest, stifling economic growth and the creation of new jobs.
“Additionally, businesses are spending thousands of pounds and precious hours on appeals, in an effort to reduce poorly calculated bills.”
The report stated that the average rateable value for pubs and restaurants decreased by 1.22% this year, ‘leading to a decrease in gross bills of 4.56%’.
The biggest decreases were reported in Renfrewshire and Clackmannanshire (20.39% and 19.57%), although the report did acknowledge an average 19.47% increase in pub and restaurant rateable values in Argyll & Bute.
Just over a quarter (26%) of pubs and restaurants were said to have seen their rateable values increase by an average of £11,509, while 61% saw their values decrease by an average of £5,516.
The picture was bleaker in the hotel sector, where 63% saw their rateable value increase by an average of £7,828, with 26% seeing an average decrease of £12,668.
However, that included hostels, guests houses and B&Bs.
Narrowing to just properties described as ‘hotels’ saw a general increase of just 0.69%, with gross bills decreasing by 1.58% when transitional relief was applied.
The rateable value of properties across Scotland are set by assessors, with the Scottish Government setting the poundage rate, which is currently 49.8p for every £1 of rateable value, rising to 51.1p for properties with a rateable value between £51,000 and £100,000 (the Intermediate Property Rate), and 52.4p for those with a rateable value above £100,000 (the Higher Property Rate).
Thompson added: “The current system of business rates is holding our businesses back, with the punitive rates they pay preventing investment.
“It’s clear a new approach is needed if we are to achieve the Barclay Review’s aim of a business rates system that supports and encourages long-term investment,” he concluded.
