Warning businesses could ‘go to wall’ over proposed rates hike
THERE has been outcry from Lochaber businesses as the ‘devastating’ impact of rising businesses rates has come to light.
The levy, which will come into force on April 1, is based on the annual rent council-employed assessors estimate business premises would command on the open market and a ‘poundage’ rate set by the Scottish Government. The increases follow the first revaluation of rental values since 2010.
The Oban Times was contacted by one Lochaber hotel, who wished to remain annoymous, after finding out its businesses rates have doubled from £22,000 to £ 55,000.
The manager said she only discovered businesses rates were rising after receiving a letter from a company asking to represent her in an appeal.
She said: ‘We have to increase our own rates to keep up with the business rates, which will price us out of the market. People will be paying the same to stay here as they would in London. No- one’s going to pay that.
‘Some hotels, like ours, have had their rates increase by 100 per cent, some by even more, and no tourism business can sustain that. All the gains the tourism industry has made in the past few years are going to be crushed.’
Lesley Benfield, Lochaber Chamber of Commerce Chief Executive Officer, said: ‘The chamber is aware of small accommodation providers facing rateable value increases in excess of £7,000 per annum and in cases where the rateable value exceeds the turnover of the business we have indeed arrived in commercial ‘La-La Land’.’
Chamber member David Wilson, of The Lime Tree Gallery, said: ‘ Commercial rental valuation should be based on the reality of the business turnover, geographic location and the current commercial rental valuation market in the hospitality sector. How can it make sense to have a valuation of 100.22 per cent of turnover?’
Caol and Mallaig councillor Ben Thompson raised the issue after learning one small family- owned business in his ward has seen its rates increase by £21,000.
He said: ‘ A number of local businesses have contacted me about increases in their business rates of up to and more than 100 per cent. The most severe increases I’ve seen so far are small hoteliers/ B&Bs with restaurants.
‘That level of extra taxation could and will put folk out of business. We’re talking tens of thousands of extra tax for businesses that may make less than that in profit.’
Scottish Government finance secretary Derek Mackay said the government announced plans ‘to reduce business rates as part of the draft budget and has commissioned a wider review of business rates and their role in supporting economic growth, led by Ken Barclay, which is due to conclude this summer’.
He added: ‘It is important to remember each council retains all the business rates revenue it collects and it is for councils to apply rates reductions, on top of existing statutory reliefs, as they see fit. Our package of measures delivers a tax cut of £155 million, which will help those who might be impacted by a revaluation. It will also mean more than half of businesses will pay no rates, 70 per cent will pay either no or less rates than they do currently and the total package of relief we are offering will increase to more than £600 million.’
Fort William and Ardnamurchan councillor Andrew Baxter said it is ‘unfair’ for the Sottish Government to ‘shift the blame and say the Highland Council can sort it out’.
He continued: ‘This will have a really big impact on businesses. I know lots of businesses in the tourism industry who are concerned about it. I will be making a case for the Highland Council to look at rate release, but it’s going to be a tough job telling them this should be a priority.
Highland and Island Labour MSP Rhoda Grant told The Oban
Times some businesses could see their business rates increase by more than 400 per cent in April, adding: ‘How can a small family business in Caol and Mallaig afford a rates increase of £21,000? It is ridiculous and huge rates hikes will deter any future businesses from investing in local communities.’
Mrs Grant urged people hit by rates hikes to appeal using the online portal on the Scottish Assessors Association’s website.
Skye, Lochaber and Badenoch MSP Kate Forbes said: ‘Interestingly, a lot of Highland businesses’ rates will fall or they will pay nothing as the Highlands stands to benefit enormously from the expansion of the rural relief and small business bonus schemes.’
The Oban Times contacted the Highland Council but it had not responded at the time of going to press.