Court to decide if businesses can get oil plunge rate cuts

● CBRE property firm argues price spiral was ‘material change of circumstances’

A key legal hearing opens today to decide if businesses in the North-east of Scotland can qualify for rateable value cuts due to the slump in the oil price in recent years constituting a “material change of circumstances (MCC)”.

In January 2017 CBRE Ltd, the commercial property adviser, won a ruling at the Aberdeen Valuation Appeal Committee that the regional economic downturn sparked by the 2014 oil price collapse represented a major change of trading circumstances as outlined in the Local Government (Scotland) Act 1975.

CBRE says the rateable values of a number of its clients’ properties in the area should be reduced to reflect the changed economic landscape following the oil price plunge.

Today and tomorrow, the Lands Valuation Appeal Court (a division of the Court of Session in Edinburgh) will hear an appeal by the Grampian (Rates) Assessor against the earlier ruling.

The court is the highest authority for the appeal process and its decision is final. The CBRE case is understood to be on behalf of about eight businesses, but it’s believed there are hundreds more that have lodged appeals and these are on hold as everyone awaits the outcome of the case.

Critics say the Grampian Assessor is a “lone voice” in claiming that there was no significant economic downturn in North-east Scotland and that, even if there was, this did not constitute a material change of circumstances under business rates legislation.

CBRE will say the Grampian Assessor’ s denial of an economicdown turn in aberdeenshire is“untenable ”. Its legal representatives are expected to argue that should the court overturn the Aberdeen Valuation Appeal Committee’s decision because of interpretation of the current legislation, this would deal a further blow to struggling regional businesses and should force Holyrood into drafting emergency legislation.

Mike Rose of CBRE Rating (Scotland) said: “The severe economic downturn in Northeast Scotland is a fact that can and should be treated as a material change of circumstances.

“The Aberdeen Valuation Appeal Committee has agreed with our view, but if the Lands Valuation Appeal Court accepts the Grampian Assessor’s arguments that this is not a MCC it will reinforce a groundswell of opinion that current legislation is not fit for purpose in terms of meeting the Scottish Government’s stated policy aim of supporting business through a rating system that responds to changing economic conditions.”

CBRE is expected to cite the Court of Session judgment in 2010 that the recession of 2008 was an MCC that allowed many ratepayers in the Scotland’s Central Belt to secure reduced rateable values and rates bills.

The Edinburgh tramworks were also deemed an MCC, and businesses along the route got rate relief in 2009.