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Graham & Sibbald’s November Rateable Business Roundup

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Graham & Sibbald’s November Rateable Business Roundup

Graham & Sibbald’s November Rateable Business Roundup
November 22
17:12 2018

Welcome to Graham + Sibbald’s fifth rating newsletter which this month provides an update on rating appeals and financial changes affecting commercial ratepayers. Tim Bunker reports on ratings issues affecting hospitality businesses, the ramifications of the Chancellor’s recent budget and outlines the comprehensive range of services provided by Graham & Sibbald…



Business rates (also known as non-domestic rates) are a tax on non-domestic properties to help pay for local council services. Each year the amount a business pays increases in line with inflation. The current revaluation took place from 1st April last year and the new rateable values will remain in effect until 31st March 2022, unless subject to modification under appeal.

Appeal Opportunities

Apart from revaluation appeal there are other opportunities to lodge an appeal against an assessment as follows:

  • If you have become a new proprietor, tenant or occupier
  • If you have carried out any physical alteration to your property which may have resulted in a new Valuation Notice being issued
  • If you consider your business as being adversely affected by external circumstances such as new business competition and/or physical or economic changes in your location

It is important to note that there are limited timescales for appeals on the above and we can provide further information.

Chancellor’s Budget

In his budget earlier this month, the Chancellor announced a £1.5bn boost to small-size high street retailers. This included a £900bn relief in business rates relief for nearly 500,000 small businesses who must have a rateable value of £51,000 or less.

This relief does not apply to Scotland. Under the Barnet formula there will be increased funding to Scotland however as Business Rates are devolved it will be up to the Scottish Government to decide exactly how to spend the money.

The Scottish Government has always referred to the Barclay Review of the Scottish rating system as being the panacea to all the problems in the Scottish High Street’s, however the original criteria specified that although the Review was to identify how the system could be reformed, the overall level of funding was to be maintained in order to provide the services upon which business rely.

Rates Relief

Since the revaluation was implemented from 1 April 2017, the Scottish Government has introduced a significant range of varied rates-relief packages to help soften the effect of large rateable value increases.

This ad hoc approach to the provision of rates relief, a significant outgoing for operators, can cause concern and confusion. Common questions include: How long will the relief remain in place? Will the percentage of relief be adjusted if improvements are carried out? And will the small business relief be lost?

In particular, the Government announced Transitional Relief for the Revaluation year but this was only for a period of 12 months. Qualifying businesses included hotels, public houses and restaurants but most were unsure if the full liability would take effect in subsequent years. In the event, this has only recently been confirmed.

The same scenario arose with Day Nursery Relief as of 1st April this year. However, it was set for a period of three years. Does that then mean that full rates will be payable from 1st April 2021? Who knows.

New and improved property relief is already obtaining a positive response, although again it was introduced from 1st April 2018 for a period of just 12 months. This provides 100% relief for one year where expansion or refurbishment has occurred, or the construction of a new building.

Although these relief schemes are welcome, the ad hoc nature of their introduction and the unknown period of their implementation will cause difficulty for businesses when planning future strategies. More certainty and the introduction of all schemes at the beginning of a revaluation – plus a full diary of their implementation – would assist everyone concerned.

Local councils will automatically apply some reliefs but operators may need to complete an application form for other reliefs.

The following discounts may be applied for:

  • Small Business Bonus Scheme
  • Fresh Start
  • Rural Rate Relief
  • Charitable Rate Relief
  • Disabled Persons Relief
  • Enterprise Area Relief
  • Renewable Energy Generation Relief
  • Day Nursery Relief
  • Transitional Relief
  • District Heating Relief
  • Business Growth Accelerator Relief

Some local councils provide an additional hardship relief if a business meets certain criteria.

Appeal Progress to Date

The negotiations on the new rateable values introduced as of 1st April 2017 are now well underway.

Scottish assessors are listing properties for valuation appeal committee hearings, which enables ratepayers (or their agents) to discuss the basis of the new rateable values. Initial discussions have covered values of small shops, offices and industrial units but not the subjects that were adversely affected by the revaluation – namely, restaurants, cafes, public houses and hotels. That said, negotiations with private surveyors and the Assessor’s Association Valuation Scheme for public houses has been agreed.

In many cases, the repayment of overpaid rates has taken an inordinate period of time, particularly where ratepayers obtain small business rates relief. Graham & Sibbald are currently chasing repayments for clients.

On a positive note, we have found that assessors are prepared to listen to a coherent case and relevant adjustments to value have been made. Recommendations from the Barclay Review, particularly with regard to the administration of the system, have yet to be implemented in Scotland.

Future Revaluations

The fact that revaluations occurred at five-yearly periods used to mean that the effect on rateable value was less extreme than it is nowadays. Problems occurred when the Government decided to cancel revaluations in 1983 and in 2015 the period was extended to seven years. The consequent jump in value brought about a chorus of complaint, so a recommendation from the Barclay Review dictated that revaluations be changed to three-yearly. Having now discussed this with various assessors’ offices and ratepayers, this proposal is likely to be unworkable and therefore not supported by ratepayers.

Graham + Sibbald’s Rating Services

  • Initial meeting with client and appeal recommendations
  • Checking rates invoices and full rates bill audit
  • Full appeal process
  • Advising on vacant property rates relief
  • Advising on rating procedures and legislation
  • Water and sewerage charges review

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Catering Scotland

Catering Scotland

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