Big increase in number of firms appealing rates

Published on Wednesday 1 September 2010 18:05

ASSESSORS face a business rates appeal headache this autumn after the number of firms questioning this year's revaluations leapt by a third compared with 2005.

The sharp increase in appeal cases follows the revelation that many Scottish businesses had been saddled with crippling hikes, in extreme cases of more than 400 per cent.

According to figures disclosed by Ryden, one of the country's biggest property agents, the number of companies launching appeals is up 22 per cent on the last revaluation, five years ago.

The firm believes this will have jumped by at least 30 per cent by the appeals end date on 30 September.

Tim Bunker, rating partner at Edinburgh-based Ryden, which has six offices in Scotland and the north of England, said a "huge number" of businesses were in the process of filing appeals, including many local authorities.

"As a firm, we are easily looking at a 30 per cent increase by the end of September," he said. "We have spoken to other contacts and agents and their numbers are up sharply as well.

"Even where rates have not gone up by a massive amount people are wanting to try to generate whatever saving they can in the current climate."

Ryden said its projection was based on in-house statistics detailing levels of new instructions from businesses and organisations such as Scotmid, National Museums and Highland Spring, as well as reappointments by existing clients.

Finance minister John Swinney has come under pressure from business groups to review the "unfair" system of calculating and appealing non-domestic business rates amid warnings that shock hikes will derail economic recovery.

In July, Scotland on Sunday revealed that local chambers of commerce were urging firms to bombard local assessors with appeals over rates, which are reassessed every five years based on the rateable value of premises.

The Scottish Government claims that almost 60 per cent of companies will pay the same or less as a result of the latest shake-up.

Edinburgh's Prestonfield House Hotel, owned by restaurateur and hotelier James Thomson, has seen its rateable value double to 199,000, meaning some 80,000 more is due in rates each year.

Ryden pointed out that rateable values had been based on averages over the last five years which took into account the property boom.

Firms have complained that the re-assessment was undertaken in April 2008, prior to the banking crisis, when many city centre rents were at an all-time high and when most companies were enjoying profits that they are unlikely to see again for several years following the recession. The majority of appeals are likely to be completed within a two-year timescale, Ryden noted.

"If appeals aren't lodged in time, businesses will have to wait five years to appeal the decision," added Bunker.

"In England, they are still completing 2005 rating appeals."