MoD hits buffers in tram work legal fight

Published on Saturday 5 December 2009 09:41

ARMY chiefs have lost a legal battle over business rates after suggestions the Capital's tram works were putting off new recruits.

The Ministry of Defence had applied for a rates reduction for its recruiting centre on Shandwick Place due to the disruption caused by the tram works during the course of last year.

Officials at the Lothian Valuation Joint Board found in its favour after suggesting that the dust and noise was likely to deter people from visiting the premises and that the MoD's "enjoyment" of the premises would be reduced.

But one of the country's most senior judges has now quashed the original decision, after the rates assessor launched an appeal.

The case is understood to be the first of around 700 outstanding cases involving firms across the city.

Each firm believes the trams have hit their business.

The MoD had secured a five per cent reduction on the rates paid for its suite of offices on the third and floor floors of 67-75 Shandwick Place between March and August last year.

It followed a decision by the city council to award a 20 per cent rates reduction to all ground-floor businesses affected by the works last year.

But the Lord Justice Clerk, Lord Gill, said there had been "no proper basis" for awarding the MoD a discount on the 67,500 it pays in yearly rates.

The judge said offices were not affected in the same way as shops, bars and restaurants, which could expect to see a drop in trade because of the tram works.

A spokeswoman for the MoD said it has "disappointed" by the judge's decision, but would not take the matter any further.

She said: "The MoD thought it had a case to get a rates reduction because of the tram works. We are disappointed with the result, but things have gone as far as they can go.

"Business has clearly been affected considerably by the tram works, and we thought we had the right to a reduction."

However, Councillor Stuart McIvor, chairman of the Lothian Valuation Joint Board, said he thought the MoD's case had been "chancey".

He added: "They're not like a shop on the ground floor, the sort of place which has certainly been affected by a reduction in footfall.

"I know a lot of businesses were granted reductions, but this one sounds a bit chancey to be honest."

Earlier this year, the Evening News revealed that hundreds of businesses in the Capital had been given up to 20 per cent off their business rates to compensate for the impact of trams, costing the public purse hundreds of thousands of pounds.

Based on an average sized unit, it is estimated that the rates reductions will already have amounted to more than 500,000 less being collected and that figure will soar as the tram work drags on.

The majority of the discounts awarded so far have been to firms based on Leith Walk, Shandwick Place and Haymarket.

Another 733 firms have lodged appeals because of the impact they say that tram work is having on them.

The next phase of tram work is expected to begin in Shandwick Place in the new year.