Shock business rates hike sparks mass protest

Published on Thursday 8 July 2010 13:13

THOUSANDS of Scottish firms are set to stage a mass protest at the "immoral" and "unjustifiable" rise in business rates threatening small and medium sized enterprises (SMEs).

Chambers of Commerce are today urging firms to bombard local assessors with costly appeals over non-domestic rates (NDRs), which are reassessed every five years based on the rateable value of premises. Hotel, cinema and theatre payments are calculated on turnover.

A revaluation based on rental prices and income in April 2008 saw firms saddledwith crippling hikes, in extreme cases of more than 400 per cent.

The Chambers of Commerce claim "totally ridiculous" rate rises threaten to drive firms out of business.

The Scottish Government has also come under attack for scrapping transitional relief, which continues south of the Border and caps rate rises in any single year.

Large corporates, which operate pubs and restaurants, are understood to have told the Scottish Government they are likely to opt for new premises in England or Wales due to the lack of support on NDR costs.

Graham Birse, deputy chief executive of the Edinburgh Chamber of Commerce, is now urging firms to appeal before the September deadline.

"The finance minister (John Swinney] has very limited room for manoeuvre," Birse said. "But the recovery depends on the ability of businesses to trade profitably through the recession and to create receipts that will allow them to employ more people, pay more taxes and generate growth."

Liz Cameron, chief executive of the Scottish Chambers of Commerce, added: "It seems strange the Scottish Government should have acted to cushion the effects of a 5 per cent rise in business rates last year through its deferral scheme, but has taken no action to support businesses facing rises of over 200 per cent in some instances this year."

The government has claimed the recent revaluation and its small business support scheme have heralded a freeze or decrease in NDRs for some 60 per cent of Scots firms.

However, the Chambers of Commerce say most of their members have been hit with significant hikes.

Julian Darwell-Stone, managing director of Tangram Furnishers in Edinburgh's Jeffrey Street, was told in March that his rateable value had gone up 65 per cent even though his rent has not changed in ten years. Darwell-Stone said: "It's a totally ridiculous, immoral and unjustifiable increase."

A Scottish Government spokesman said: "Almost 60 per cent of ratepayers pay less or no more in business rates as a result of revaluation - with average savings of more than 1,300, almost double the savings in England under their transitional relief scheme." He said its own package of relief was worth 2.4 billion.