Huge delays expected for rates appeals

Published on Wednesday 29 September 2010 13:13

THOUSANDS of Scottish firms hit by hikes in business rates are facing years of delay as assessors struggle to cope with the vast backlog of appeals.

Assessors will spend the next fortnight totting up the number of cases on their books following last week's deadline to appeal the controversial business rate revaluation that came into effect in April.

Property experts and business groups fear firms may have to wait up to four years to have their cases settled amid predictions of an unprecedented number of appeals.

Colliers International director Peter Muir said early indications are that there will be a rise of 20-30 per cent once all of the last-minute appeals have been accounted for.

"Given the current economic climate, I would anticipate more appeals than we have ever seen, in terms of absolute numbers," Muir said.

This claim is contested by the Scottish Assessors Association, which believes appeals will be roughly level with the 54,500 lodged following the last revaluation in 2005.

However, even if the level of complaints remains steady, experts predict fewer will be settled at the initial negotiating stage and cash-strapped companies could face long delays as they fight their case.

Non-domestic rates are recalculated every five years based on the rental value of a firm's premises - except for hotels, cinemas and theatres, where payments are assessed according to turnover.

This is the first time in the history of the modern system that revaluations have coincided with a recession. The increases, some up to 400 per cent, have come at a time when spending is subdued.

Steven Winyard, managing director of Stobo Castle, said: "The hotel industry is completely up in arms about this. They are all going to lodge appeals and there could be such a backlog that it could easily take four years before our appeal is heard." He has already been forced to lay off six staff.

Julian Darwell-Stone, whose Tangram furnishing firm in Edinburgh has had an 86 per cent rise in rates, said the cost of the appeals process will put undue strain on business and government budgets. He described the increases as "ridiculous, immoral and unjustifiable".

"The public authorities will have to spend all of this money dealing with these appeals, and I am told they will probably lose the vast majority of them," Darwell-Stone said.

Graham Birse, deputy chief executive of the Edinburgh Chamber of Commerce, dismissed assessors' suggestions that the number of appeals would be on a par with previous years. He said that as of 6 September, 3,500 appeals had been filed in the Lothian region, and that was expected to double to 7,000 - equivalent to 25 per cent of all rated premises in the region.

"If a quarter of the people - including those who don't pay rates at all - are appealing, something is out of joint."