THE Great rates revolt
...Led by this nursery boss who faces an eye-watering £56,000 hike and – like thousands of hard-working Scots – fears for her future amid spiralling tax
A CHILDREN’S nursery boss is leading a rebellion against an increase in business rates which risks putting firms out of action.
Dozens of companies are already preparing appeals to local authorities against tax rises, The Scottish Mail on Sunday understands.
They fear the massive tax rise from the first commercial properties revaluation since 2010, which will come into force in April, will make many businesses unsustainable. It is particularly embarrassing for the Scottish Government as the rising tax bills of nurseries jeopardise its flagship manifesto pledge of doubling the number of free hours of childcare for four, three and vulnerable two-year-olds, to 1,140 by 2020.
Parents could also suffer if nurseries pass on the cost to them.
Mariessa Devlin, who runs five Enchanted Forest nurseries, has written to councillors and MSPs highlighting the problem, while also trying to raise awareness among other nurseries, many of which, she believes, do not realise they are about to be hammered financially.
Of her five nurseries, four will see their bills go up, with two more than doubling. Only one will benefit from a cut – of 0.1 per cent.
One of Mrs Devlin’s nurseries, in Thornliebank, Renfrewshire, will suffer the biggest increase, of £33,184 a year, or 155 per cent. She estimates her business faces a total rates hike of about £56,000.
The mother-of-two said: ‘We were astounded when we saw the figures. A lot of operators out there may not know what is about to happen. I firmly believe a lot will go under because of this.’
Business rates are carried out independently of government and are based on property values. But Mrs Devlin believes a change of approach may be behind the increase in rates.
She said: ‘Historically, nurseries have been treated in a particular way. It looks like now we’re being treated in the same way as offices.’
Mrs Devlin said she thinks nurseries will probably have no option but to pass on some of the increased costs to parents.
Gary Walton, a chartered surveyor who is director of businessratesadvice.com, also believes nurseries have been particularly hard hit.
He said he has already spoken to ‘dozens’ of firms who are planning to appeal. ‘They are shocked,’ he added. ‘I’ve spoken to a lot of business operators who are fuming.’
Some sectors have been particularly hard hit and Mr Walton said: ‘I’m seeing a lot of hotels in Central Scotland. Some of those values have doubled. And nursery values appear to have increased, particularly in Renfrewshire.
‘Many businesses will be shocked when the bills come in and they will not have budgeted for potential increased costs which could, in some cases, make their businesses non-viable, resulting in closure, the loss of livelihoods and employees being made redundant.’
Nicola Sturgeon had already ordered a review of business rates by ex-RBS chairman Ken Barclay.
But Daniel Johnson, Scottish Labour’s education spokesman, said: ‘I have heard from many nurseries who are planning to raise fees, and even struggling to stay afloat given the hike in business rates.
‘I want the SNP Government to consider adopting a system of transitional relief, like England and Wales are putting in place. Otherwise, it will ultimately be Scotland’s parents and toddlers who will be paying for the SNP’s rate rise.’
A Scottish Government spokesman said: ‘Rating valuation of business properties is undertaken by independent assessors, funded by local councils.
‘The Small Business Bonus Scheme – which has already saved businesses £1.2 billion – will be expanded from April to lift 100,000 properties out of rates completely.’
‘A lot will go under because of this’