The Scottish Business Ratepayers Group (SBRG), made up of eight senior surveyors and property consultants representing a large number of business rate payers in Scotland, has long been urging ministers to act on the consultation, as it believes non-domestic rates based on outdated, pre-financial crisis valuations are a major barrier to investment in sectors, such as retail.
The situation has been made worse since a court decision made it harder for businesses in Scotland to appeal a valuation on the basis of a material change in circumstances (MCC).
Now Scotland could be left with a system that is even more unfavourable compared to the rest of the UK, after the Westminster government published measures in the Enterprise Bill to address valuation appeals.
The changes being proposed south of the Border are not ideal and have been criticised, but at least they are an attempt to respond to the UK government’s own consultation. Scotland could steal a march on the rest of the UK if it brings in the right measures, but to simply do nothing is unacceptable.
It has now been two years since the Scottish Government began consulting on the business rates system and the SBRG feels that limited progress has been made. Scottish businesses continue to suffer as a result of the restrictive valuation appeal system in Scotland.
If no action is taken, the consultation exercise will have been a waste of time, a waste of taxpayers’ money and a further step to ensuring ratepayers have no confidence in the Scottish Government’s promise of listening to their concerns. What’s more, Scotland will be left with a system that is unfavourable compared to the rest of the UK, and in industry sectors where sky-high rates are now a major issue, companies will simply choose to invest elsewhere.
Recent independent analysis of the Scottish Government’s consultation showed the majority of responses from ratepayers highlighted the need for reform in three key areas. Respondents said revaluations should be carried out more frequently, with the most popular option being a three-year cycle; MCC appeal rights should be reformed in line with the rest of the UK; and Valuation Appeal Committee panels should be reformed to include chartered surveyors to ensure ratepayers appeals are dealt with by qualified experts.
The independent analysis also showed that the majority of respondents were against the prospect of charging fees to appeal their values, on the grounds that it was completely unjust. The Scottish Government had suggested in the original consultation document that this was a proposal it was considering.
We are calling on the Scottish Government to take note of this independent analysis, purposely engage with the respondents and, more importantly, action the reforms that have been proposed. There is an opportunity here to build a system that is the best in the UK but we are in danger of letting it slip by.
Peter Muir is head of rating with Colliers International in Scotland and spokesperson for the Scottish Business Ratepayers Group (Colliers International, Thomson Surveyors, CBRE, Eric Young & Co, GVA James Barr, DTZ, Rapleys, GL Hearn)