The Rates of Change - Rateable Value Assessments

Businesses all over the country are at this time receiving Revaluation notices in respect of business properties from their regional assessor.

The evidence is that, as widely predicted and feared, the new rateable values assessed are orders of magnitude higher than the old ones. The increase in costs that this will trigger is potentially crippling. The Scottish parliament has helpfully introduced Small Business Relief (SBR), which in recent years has reduced the burden of business rates substantially, in some cases completely. But the effect of this increase in rateable value will be to push most businesses beyond historical SBR thresholds. Even those maintaining current levels of entitlement will be vulnerable to any changes in policy on this relief in the future such that the impact of the rateable value reassessments would only be delayed.

Even if SBR remains untouched, this increase in rateable value will be the basis for assessment by Scottish Water for businesses for whom the installation of water meters is impractical, and for all businesses for the next few years during the transitional charging period where water rates are assessed on a combination of actual metered use and rateable values. The increases in recent years by the water companies alone have been nothing short of obscene. A potential further doubling of these costs overnight is taking obscenity beyond pornography in its distastefulness. And this at a time when property-based businesses are badly affected by other Machiavellian instruments of torture, such as the current government’s repeal of the Furnished Holiday Lettings (FHL) Rules that mean many self catering holiday businesses will seriously have to consider ceasing trading.

In fact, the rateable values being assessed on self catering properties will be particularly unreasonable. Many of these “cottages” are not previous domestic dwellings being re-used, but are purpose-built conversions of old outbuildings as holiday lets, which by design are not intended for permanent occupation. In particular, the living space is often very small relative to the number of beds and only works acceptably for short occupancy in the knowledge that guests, as holiday-makers, will spend most of their stay away from the accommodation. Yet the rateable values now being placed on them will result in charges sometimes greater than those of domestic rates paid on family homes many times their physical size.

Of course, such assessments should be appealed. In this case, though, I am strangely hopeful that many deserving cases will be heeded.