Investors in renewable energy projects face a financial shock this spring when a business rates revaluation comes into force, a Scottish property consultancy has warned.
CKD Galbraith said although a UK-wide property revaluation for business rates will see some categories of property fall in value reflecting a decline in occupier demand post-recession, owners and operators of hydro schemes and wind turbines could see a rise.
Many of our clients are facing a significant increase in liabilitiesCalum Innes
Partner Calum Innes said that up until April 2016 the Scottish Government provided 100 per cent rate relief in respect of smaller renewable projects as part of the general support for low carbon technologies.
“But this was removed and the situation has now been compounded by many operators facing a huge increase in rates liability with there being no transitional relief to cushion the blow,” he warned.
“Many of our clients are facing a significant increase in liabilities with respect to business rates as in some cases valuations have increased in excess of 400 per cent.”
Draft valuations have already been published online by the assessor and appeals can be lodged for a limited period.
“We would suggest that operators of renewable installations should review this information to inform future budgeting,” said Innes.
Revaluation usually occurs every five years but the revaluation scheduled for 2015 was postponed and it is therefore seven years since the last revaluation. All properties are reassessed having regard to changes in the market over the intervening period and the new rateable value is used to calculate the rates bill by applying a formula known as “poundage”.