Chamber says rate changes ‘could bankrupt businesses’
Revaluations: Finance secretary urged to rethink ‘punitive’ levy
Hundreds of north-east businesses could be bankrupted by “punitive” business rate changes, local industry leaders have warned.
Aberdeen and Grampian Chamber of Commerce (AGCC) has written to Finance Secretary Derek Mackay urging him to rethink a revaluation of the levy which could see companies’ bills rocket by more than 200%.
The economic body argues that the increases are particularly ill-thoughtout given the recent downturn
“Failure to do so could see some companies going to the wall”
in the oil and gas industry.
The intervention came as the Scottish Conservatives called for the Holyrood Government to set up a fund to provide transitional relief for firms hit by rocketing rates.
The letter states: “The revaluations (RVs) would result in enormous upward cost pressure on northeast businesses, which are already struggling with the impacts of an extended economic downturn.
“In the past couple of years our region has suffered tens of thousands of job losses, reduced economic output, decreased property sales, falling hotel revenues, and an increase in corporate insolvencies.
“The RVs proposed for 2017 have the potential to drive many regional businesses which have managed to stay afloat into insolvency or at best to lead to further job losses.
“This is coming at a time when the Scottish Government needs to do even more to help the region, not create additional hurdles.”
Official government figures have shown that local publicans are facing rises in their bills of up to 259%, while oil service companies are similarly looking at increases of up to 218%. Comparative figures for the rest of the UK show that increases in the north-east outstrip those facing other parts of Scotland and all but one region in England. The figures have led Tory MSPs to call for a government fund to help businesses affected by the hikes.
In a joint statement, Aberdeenshire West’s Alexander Burnett and north-east region representatives Ross Thomson, Peter Chapman, Liam Kerr and Bill Bowman, said: “It is no exaggeration to say that failure to do so could see some companies going to the wall.
“Given the well-documented difficulties in the local economy, the Scottish Government must step in to prevent further job losses at a time when thousands of posts have already been cut.”
A Scottish Government spokesman said: “The Small Business Bonus Scheme will be expanded from 2017 to lift 100,000 properties out of rates completely, while 8,000 business properties will no longer pay the Large Business Supplement, and the overall business rates poundage – the core tax rate that applies to the rateable value of business properties – will also be cut by 3.7% to 46.6p.
“The Scottish Government remains committed to supporting the economy in the north-east.”
APPEAL: Derek Mackay, Cabinet Secretary for Finance and the Constitution