Time to focus on rates levels

Non-domestic rates represent a significant cost to Scottish businesses – and there is an important date coming up tomorrow.

Rates bills are based on the rateable value of a property. These are assessed by one of 14 local assessors covering the whole of the country.

The rateable value is then multiplied by a rates poundage rate – which differs depending on the amount of the rateable value – to arrive at the rates payable.

The rates poundage is set by the Scottish Government, and changes annually.

In certain circumstances reliefs may apply, although those are the exceptions rather than the rule.

The only part of the rates-bill equation that is open to being challenged is the rateable value.

Rateable values of all non-domestic properties in the country are to be re-assessed from April 1 2023, with draft rateable values to be published tomorrow.

With a background of legislative changes, a global pandemic, economic turmoil, soaring energy costs and a cost-of-living crisis, this will be a revaluation unlike any before.

In addition, from 2023 onwards, revaluations will now take place every three years instead of the “usual” five years – although the previous two revaluations actually took place in 2017 and 2010.

At the last revaluation in 2017, rateable values were based on annual rental values as they stood at April 1 2015.

At the 2023 revaluation, the new rateable values will be based on annual rental values as at April 1, 2022. Many businesses will see the rateables value of their premises reduce – sometimes significantly.

Some will see their rateable values increase, and others may see little change in the rateable value proposed by the assessor.

The one common factor is that, no matter what happens to the rateable value of a property, a revaluation gives every property owner or occupier the chance to challenge their rateable value.

That opportunity should not be overlooked.

Even if the rateable value of your premises is to fall, it could perhaps be even lower. Never simply accept whatever new rateable value the assessor proposes without taking professional advice from a rating specialist.

It is also worth noting

that the Scottish Government is introducing legislation at this revaluation to fundamentally change the process to challenge a rateable value.

The new system makes it

much more difficult to challenge whatever rateable value is set by the local assessor.

The new appeal regulations require a detailed understanding of the appeal process and

market evidence – and therefore we would strongly recommend that any proprietor or occupier seek professional assistance at an early stage to ensure they successfully lodge a valid proposal.

Pandemic winners, such as online retailers like Amazon, could face a rates rise.