Court ruling could spare property developers rates hike

PROPERTY developers could be spared paying business rates on properties they are refurbishing following a landmark ruling from the UK Supreme Court.

Judges have decided that a building should not be charged full business rates as if it were fully usable when it was undergoing refurbishment.

In Scotland properties only escape rates if they are being converted into another use, but now lawyers will be able to argue that major works or alterations should be covered too.

The ruling comes after massive pressure was put on lawmakers following the first rates revaluation since 2010 left thousands of businesses facing crippling rises

SNP Finance Minister Derek Mackay belatedly announced a raft of targeted reliefs for next year, after a campaign by The Herald highlighting the threat to jobs from hikes to bills.

The Supreme Court said yester- day that a Sunderland property should not have been charged business rates as if it were fully usable when it was undergoing refurbishment. Instead, the court ruled, the property should have been valued at the nominal sum of £1, resulting in a much-reduced rates bill, a ruling which has implications for businesses across the UK.

Louise Daly, senior surveyor with Colliers International in Scotland, said the ruling would give lawyers something more to rely on when negotiating rates with local authorities.

She said: “While there is a system in place in Scotland, the court’s decision gives us something elsetorelyon.Itcouldbeabighelp to property developers, allowing them to make big savings on their business rates which they can then plough back into the development. Going forward, the court’s decision will have implications and it will be interesting to see what the assessor does next.”

A Scottish Government spokeswoman said: “We note the judgment of the Supreme Court. Our package of measures delivers a tax cut of £155 million which will help those who might be impacted by a revaluation.

“From April 1 more than half of businesses will pay no rates, seven out of 10 will pay either no or less rates than they do currently, and the total package of reliefs we are offering will increase to more than £660m.”