The Scottish Government’s commitment to release draft rateable values for the 2017 Revaluation in mid-December became a reality on 16 December last year. With only a month to go before the draft figures become a reality, the conclusion, as with most revaluations is that there are some big winners and big losers.
Broadly speaking the retail sector in Scotland is set to fall off a cliff, with up to 70% falls in rateable value between revaluations. Barring the popular Buchanan Street in Glasgow, Princes Street and George Street in Edinburgh the remainder of the country is set to benefit through lower rateable values reflecting the decline in rental values that has been so evident since shortly after the tone date (1 April 2008) for the 2010 Revaluation.
Grade A office premises in Glasgow and Edinburgh are dropping up to 20%, whilst similar stock in Aberdeen is increasing by as much as 30%. Aberdeen is one of the worst affected areas, with the tone date of 1 April 2015 falling a few months short of the global oil price drop converting into a fall in rental values across the city.
In some positive news, Scottish Government has harmonised the Uniform Business Rate (UBR) with that announced in England at 46.6p. However, whilst the harmonisation is a positive, the Scottish Government has doubled the large business supplement from 1.3p to 2.6p, resulting in any ratepayer occupying a property with a rateable value above £51,000 having an overall multiplier of 49.2p compared with 47.9p in England.
Furthermore, the banding for 100% small business relief will be increased from £10,000 to £15,000 rateable value, resulting in some 100,000 properties benefiting from a reduced rates bill.
Despite these concessions, the Scottish Government has come under much criticism from ratepayers leading to the Finance Secretary, Derek Mackay, announcing on 21 February further assistance, including:
- Rates liability increases capped at 12.5% for the hospitality sector and offices in Aberdeen and Aberdeenshire
- Relief for renewables companies, including hydro
- Confirmation of no charges for revaluation appeals
- Early action on the findings of the Barclay review into business rates
- Working with local authorities to introduce a local rates relief scheme to support key sectors or localities
Once the 2017 Rateable Values come into effect on 1 April this year, there will only be a 6 month window in which to lodge an appeal. Scottish ratepayers will have until 30 September 2017 to lodge appeals or face losing the right to appeal until the next revaluation in 2022.