Rates court decision boosts retailers but hits Holyrood budget

RETAILERS and landlords yesterday cheered a “landmark” Scottish re-valuation case that could see rate-payers save millions of pounds a year but could blow a hole in the Scottish Government’s budget.

Shop owners and the landlord of the Mercat shopping centre in Kirkcaldy won an appeal against the Fife rates assessor, in order to take into account the recession’s effects on the rental value of properties.

The assessor had issued the 2010 valuation roll with rental values based on April 2008 rents, almost double those of September 2009, ignoring reduced rental levels established during 2009. The successful appeals will see the 2009 “rateable values” reinstated from 1 April, 2010.

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Brian Rogan, senior surveyor at Colliers International in Scotland, who led the appeal on behalf of retailers, said: “Common sense has prevailed.

“This is a test case, which is also the first step towards establishing that rateable values across Scotland correctly reflect the current economic conditions. If unchallenged, the decision will help both landlords and tenants in making premises more affordable and, potentially, stimulating economic activity.”

The Fife assessor has a 14-day period in which to lodge an appeal to the Lands Valuation Appeal Court.

David Lonsdale of CBI Scotland said the result “could potentially lead to a wide range of firms seeing their liability for non-domestic rates being reduced”.

He added: “That could then have implications for the Scottish Government’s budget, which is expecting a bumper harvest from business rates income over the next few years.

“Any shortfall in business rates income could well tempt ministers to tap the business community again with further tax rises, in addition to its existing plans to generate £146 million in new revenues with new taxes on larger retailers and firms with empty premises.”