Businesses have launched a fightback over plans by the Scottish Government to postpone the rating revaluation by two years, a move which has been described as a “stealth tax aimed at the heart of the Scottish economy”. Calling on MSPs to intervene, firms have given their backing to the ‘No Delay To 2015 Revaluation’ online petition that looks to overturn the two-year delay.
The decision to adopt the same policy as the Westminster Government and put the revaluation back to 2017, means businesses will continue to pay business rates based on high property values in 2008, instead of current values. According to research by Colliers International, rental values have dropped by an average of 23 per cent since 2008 across Scotland.
Peter Muir, director and head of rating for Colliers International in Scotland, who spearheaded the petition, said: “The decision to postpone the revaluation by two years rides roughshod over Scottish businesses and the harsh realities they have to face up to. For the retail sector, in particular, this could have a devastating impact.”
The petition has already secured prominent support, with Scottish Chambers of Commerce and retailer Internacionale backing the campaign.
Chief executive of Scottish Chambers of Commerce, Liz Cameron, said: “It is bad enough that the 2010 revaluation of business rates was predicated upon notional rents immediately before the Scottish economy entered the longest and deepest recession in modern history – a recession which we continue to feel the effects of some five years later – but the decision by the Scottish Government to prolong these false valuations still further flies in the face of common sense. Scotland needs a rating system that reflects the challenges of doing business in Scotland today, not one that is based upon the pre-recession boom years.”
As one of the UK’s largest fashion retailers, the decision to postpone rating revaluation would have a significant impact on Internacionale, which has 150 stores throughout the UK, 25 of which are in Scotland. Carol Morrison, the company’s property manager, explained: “The challenges facing retailers are well documented and the proposed delay to revaluation would heap further pressure on a sector that plays a key role in the wellbeing of the Scottish economy. We hope the Scottish Government will see the serious impact this would have on many businesses and withdraw its earlier proposal.”
The Scottish Government’s consultation sets out proposed reform of the non-domestic rates system. In a surprise move, the decision to force a delay to the revaluation programme, referred to indirectly in the in the Ministerial foreword of its ‘Supporting Business - Promoting Growth’ report, was not widely known.
Peter Muir continued: “This does exactly the opposite of what the Scottish Government has declared publicly as its policy, where it is committed to allow businesses to ‘set-up, grow and flourish’. At a time when businesses need all the support they can get, a stealth tax aimed at the heart of the Scottish economy means many businesses are being denied decreases that could mean the difference between survival or closure.”
This latest announcement follows the recent news of changes to empty property relief. The measure, according to the Scottish Government, will force landlords to reduce asking rents to stimulate the property market.
However, according to Peter Muir, the move means Rateable Values remain considerably higher, which will cause considerable concern to any potential tenant looking to occupy a vacant property.
The ‘No Delay To 2015 Revaluation’ petition is available on the Scottish Parliament’s website (www.scottish.parliament.uk). The deadline for signatures has been extended to 5 March.