A panel of senior advisers to Scotland’s business community has called on the Scottish Government to deliver on its earlier promise to bring the non-domestic rating appeals regime back into line with England and Wales, by removing the “the competitive disadvantage now facing Scottish business ratepayers”.
The Scottish Business Ratepayers Group (SBRG), made up of eight senior surveyors and property consultants representing a high volume of business rate payers in Scotland, believes that legislative reform is urgently needed to counter the negative economic effects the Scottish appeals system has on local firms. Its findings are set out in a review of the current regime, which has been presented to the Scottish Government.
A failure to create a level playing field with other parts of the UK will prevent Scottish businesses from appealing against valuations when their circumstances change. Businesses north of the border could be being overcharged by as much as 30 per cent by comparison to business south of the border, in the absence of an appeals system comparable with England and Wales.
This discrepancy has emerged following an earlier landmark appeal involving high street retailer Schuh (Assessor for Glasgow V Schuh & Others [2012] CSIH 40XA129/11 and its subsequent re-hearing Schuh & Others v Assessor for Glasgow [2013] CSIH 93XA121/13). Previously, businesses in Scotland were allowed to challenge rateable values where circumstances had changed, for example, new competing developments in the area, removal of transport links or an increase in the number of empty properties in the neighbourhood.
The court ruled that the option to appeal, known as Material Change of Circumstance (MCC) appeal right in Scottish legislation, was “severely limited in its scope”, this is not the case in England and Wales. This has seen subsequent moves by ratepayers to appeal a decision relating to a property’s rateable value severely limited.
Peter Muir, spokesperson for the Scottish Business Ratepayer Group and head of rating for Colliers International in Scotland, said: “The Scottish Government has previously highlighted its commitment to securing a fairer, transparent rating system that supports business. However, we are faced with a system that is a competitive disadvantage to Scottish business ratepayers, compared to other parts of the United Kingdom. This is not good for existing Scottish businesses or businesses looking to locate and invest in Scotland.
“The Scottish Business Ratepayers Group, therefore, calls on the Scottish Government to take urgent steps to remove the gap that has emerged in legislation and provide the required support for business that the MCC law was originally designed to achieve. In particular, the definition of MCC in Section 37 of the Local Government (Scotland) Act 1975 must be amended, to ensure this imbalance is removed and the restoration of a level playing field.”