Business rates increases hit licensed trade the hardest

The long gap between the revaluation date and the settlement of appeal could see businesses failing in the intervening period

Analysis conducted by Ryden’s Business Rates experts shows rate payers within the hospitality sector are amongst the hardest hit businesses in Scotland.
Hotels, pubs and restaurants have seen the rateable values of some premises more than double with the rateable values set now staying in place for the next five years.
A business can appeal its rating assessment from when the new rates take effect until the end of September 2017. However, even if an appeal is made it can be up to two years before the appeal is heard.
Business rates payments are due from 1 April 2017 with no transitional relief to help licensed premises pay their rates bills in the meantime. The long gap between the revaluation date and the settlement of appeal could see businesses failing in the intervening period.
Moira Walker, Head of Rating at Ryden said: “The scheme of valuation for licensed premises is unfair and takes no account of the market reality experienced by these businesses. The Scottish Assessors formula, based on a hypothetical achievable turnover, does not look at profit margins and operating costs and therefore penalises outlets in poorer, price sensitive areas where gross margins are low. It also penalises outlets which have higher operating costs.
To calculate rateable values by concentrating exclusively on gross turnover is a fundamentally flawed approach. A more equitable system would be one where the calculations are not based on a fixed percentage but where the assessors look at other factors such as operating costs and the range of facilities offered.
I am delighted to see the lobbying being done by organisations like the Scottish Property Federation is starting to be heard by the Scottish Government. I recommend local authority transitional relief schemes be brought in across Scotland for all sizes of business.”
Examples of Rateable Value (RV) changes in the Licensed Trade in Scotland
Rate Payer
2010 RV
2017 RV
% change
Grand Central Hotel, Glasgow
Old Bank Bar, Reform Street, Dundee
Scotts Bar & Restaurant, Irvine Road, Largs
Mosset Tavern, Gordon Street, Forres
Fonab Castle Hotel, Pitlochry
Bon Vivant Restaurant, Thistle Street, Edinburgh
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