MORAY BUSINESSES THREATENING closure and loss of jobs over crippling business rates increases proposed for April are receiving few signs of hope from Scotland’s finance secretary.
While final valuations are not being published until March and businesses will have until September to appeal, they will be expected to pay the new rates until their appeal is heard.
However, businesses have already been notified of the proposed initial level of their new rates – and while many have received reasonable increases or even decreases, some, such as the Beach Bar in Lossiemouth, are facing hikes of over 200%.
And that, they insist, will be enough to force them to curtail operations – or even close down altogether.
Beach Bar owner Graham Fleming has invested heavily in improving his business in recent years, seeking to provide greater comfort for his customers in a bar/restaurant that boasts superb views over Covesea and the Moray Firth.
However, he is baffled over how assessors managed to propose an increase in the rateable value of his business from £13,500 to £42,750: “The figures have been assessed looking at the last three years’ accounts,” he said, adding: “But this cannot be paid – I cannot increase profit by 300%.”
Other businesses in Moray are reporting proposed increases of around 10% but several are unhappy over the increases they face or can understand the methodology used by assessors in reaching their recommendations.
“We have been assessed every five years and have never had anything like this,” Mr Fleming said, adding: “We are not in a particularly favourable location with no street lights and our own road so this is completely unfair.
“If I have to close there would be 20 people out of a job – small businesses are going to suffer and it is so sad that a lot may be forced to close.”
However, Scotland’s Finance Secretary Derek Mackay has insisted that there will be help for businesses saying: “The Budget I published before Christmas includes measures to help with the rates revaluations and to support our commitment to Scotland being the best place in the UK to do business.
“Firstly, by raising the threshold for 100% rate relief under the Small Business Bonus to £15,000 rateable value, over 6,000 businesses in Aberdeen and Aberdeenshire will simply not have to pay rates at all.
“Secondly, to ensure that only the largest businesses pay the large business supplement, this year’s Budget increases the threshold, so it only applies to businesses with a rateable value over £51,000 – meaning 400 fewer big businesses in the area will pay the supplement, saving them money.
“And, because we recognised that the revaluation of business properties being undertaken by the independent assessors for the local authorities would see an increase in rates bills for some businesses, I took the decision to cut the tax rate that applies to a property’s rateable value – by 3.7% to 46.6p in the pound, supporting all those businesses who do have to pay rates.”
Many businesses have insisted that the Scottish Government could and should do much more – or face a catastrophic rise in the number of businesses that simply cease trading.
One idea has been that the SNP Government bring forward a transitional relief system, phasing in large increases over a period. That idea has been dismissed by Mr Mackay, who said: “Having looked at the impact that would have, I cannot justify keeping bills up artificially for small firms or having large utility companies – who would be the main beneficiaries – subsidised by smaller rate payers.
“However, it is possible for local schemes to be put in place by local authorities. Local authorities retain all the revenue from business rates and, through our Community Empowerment Act, have the power to offer further rate reductions on top of those offered by the Scottish Government.
“Local authorities can use rate reductions to attract new investment into town centres, to target specific locations or sectors of their economies or in this case, to alleviate the impact of a revaluation.”
Businesses in other parts of the north east are already preparing to fight the rises, which were calculated before the global slump in oil prices struck.