Rates cap a ‘hollow’ win

Window to appeal higher bills, says expert

Scottish Finance Minister Derek Mackay’s 12.5% one-year cap on rates bill increases for hotels, pubs, cafés and restaurants is welcome news for ratepayers “lucky” enough to benefit.

As is the more recent announcement by Culture Secretary Fiona Hyslop that self-catering accommodation, timeshares and caravan sites will enjoy the same reliefs granted to hotels.

However, this is a hollow victory for ratepayers as, by definition, those benefiting from the cap are the same ratepayers who will be facing the worst longer-term pain as a consequence of the 2017 revaluation.

The detail of the cap is yet to be made available, but it is a short-term measure designed to ease the pain for some of those ratepayers worst affected by the revaluation.

The rateable values set at the revaluation last for five years, not just one, so the cap offers no comfort beyond this time next year.

The political response to the revaluation furore has been similar south of the border, where Chancellor Philip Hammond was forced, in his Spring Budget, to announce his own package of relief for those hit the hardest by business rates increases.

The revaluation has been, and continues to be, a hot topic in the business community and the political world on both sides of the border.

This is not the first revaluation and will almost certainly not be the last, but it does seem to have been the most contentious, for a variety of reasons.

Much of the “noise” surrounding the revaluation has been politically motivated, but the fact remains the revaluation affects every single ratepayer. Some ratepayers will see their bills fall, some will see theirs stay roughly the same, while many others will face increases – sometimes very substantial ones.

Whatever the circumstances – win, lose or draw – every landlord and every occupier has the right to appeal the rateable value of their property before the end of September 2017.

Rating can be complex, but given that the rateable value of a property is fundamental to the rates bill calculation, and that it is the only part of the calculation that can be appealed, I would strongly urge ratepayers not to simply accept their new rateable value.