FEARS have been raised that Scottish firms could face a “disastrous” delay in expected rates revaluations after the UK government postponed its business property taxes review until 2017.
Peter Muir, director and head of rating for Colliers International in Scotland, warned that policymakers north of the Border should not follow suit, arguing that any delay in a rates revaluation from its current due date of 2015 could be the “final nail in the coffin for many hard-pressed retailers”.
Businesses in England and Wales that were eagerly awaiting a revaluation in 2015 – which was expected to reflect lower rents and property values from a high in 2008 – were left disappointed after the UK government announced a plan to postpone the next review of business rates to 2017.
Brandon Lewis, the parliamentary under secretary of state for communities and local government, last week announced the move, arguing that it would offer “tax stability”.
He said: “A revaluation at this point would be likely to result in sharp changes to business rate bills in many parts of the country and in many sectors.”
Lewis said that primary legislation will be brought forward through the Growth and Infrastructure Bill, which is due to be laid before parliament in Westminster soon.
Muir dismissed the UK government’s claims that the move would help businesses, and instead suggested it was a tax grab.
He said: “The UK government’s attempt at packaging this as a bonus for businesses is grossly misleading. This news will turn out to be the final nail in the coffin for many hard-pressed retailers across England, who had been eagerly awaiting the five-yearly revaluation.
“Rental values for a large number of businesses having plummeted over the past four years and a revaluation would have been welcome in most areas.”
Muir added: “The government knows that a huge proportion of businesses would have had very reasonable grounds to query their rates bills at the 2015 revaluation. However, with a ‘Tone Date’ of 1 April 2013, they would initially receive some comfort in a rateable value substantially below current levels, given the market, when compared to the 2010 revaluation tone date of 1 April 2008.”
He warned that businesses, particularly struggling retailers, might not survive the delay in the potential rates reduction and called for a shorter revaluation period, rather than a longer one.
“Instead of looking to increase the term of a five-yearly revaluation, the government must now look to shorter revaluation cycles, to ensure that businesses are paying fair and relevant business rates,” Muir said.
“Putting this on hold until 2017 simply means that decreases of value and subsequent much-needed cash will have to wait a further two years. Many businesses will not survive for this additional period.
“The Scottish Government must urgently decide whether it will follow on the coattails of Westminster, with the disastrous consequences such a move would have to our local economy.
“Without such assurances, the financial burden on struggling businesses will continue to increase, accelerating the pace of closures and striking a further blow to Scotland’s ailing high streets and the wider economy.”
A Scottish Government spokeswoman said it would consider the implications of the UK announcement.
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