The impending revamp of Scotland’s business rates is set to prompt a blizzard of appeals from anguished publicans – who are incensed at proposed rises which bear no relation to their earning capacity.
But meanwhile businesses currently rated below £10,000 will be exempt, and for many shops – including supermarkets – there will be substantial decreases.
However Alex Fleming, Business Improvement District (BID) manager for Falkirk Delivers, says her personal feeling is that while some will clearly benefit the whole model of rates assessment is firmly stuck in the past.
“It will be good news for quite a lot of shops, but I think there ought to be some relationship to what places are actually capable of earning.
“With this system it’s still all about bricks and mortar”.
Alex makes the point that the rates as proposed are estimates and not set in stone – although for some of the likely losers in the equation there’s little apparent light at the end of the tunnel.
Across the board though, many of Falkirk’s retail outlets may expect to do well from the final outcome.
At a time when town centres across Scotland are battling to counter the effects of out-of-town malls and internet shopping a lower rates bill is seen as a lifeline to local economies.
The entrepreneurial, small scale sector stands to do best of all, as – again in the hope of boosting the high street economy – these will in many cases have no rates burden to meet at all.
Around 100,000 across the country are reckoned set to be completely exempt from rates.
But other business people – pubs, again – are incredulous at the vast sums the assessors seem to think their premises are worth.
Their rates are assessed on a different basis, which takes turnover into account - but turnover in an industry where margins can be notoriously tight is a very different thing from profit. Melissa Tocher, lessee of Falkirk pub The Magpie, launched an online petition to complain at her rates rise estimate, which would see her current payment more than double, up from £11,500 to around £25,000, at a time when pub business is under pressure from cheap drink in supermarkets and restrictive legislation.
“If things weren’t bad enough your Sky TV charges and licence fees are linked to rates, so you are hit yet again”, she said. “This is not just me not wanting to pay a steep rates bill, it’s a whole lot of publicans being asked to pay ludicrous rates which they cannot possibly afford.”
Several other Falkirk pubs are facing equally high increases.
Melissa added: “This sort of rise is beyond belief. It’s almost as if they are determined to close pubs down and bears no relation to any kind of economic reality.”
Paul Waterson, chief executive of the Scottish Licensed Trade Association, told the Falkirk Herald that this latest body blow to pubs could be “the death knell” for outlets which survived previous threats to profitability.
Rates shocker ‘makes it impossible’ for businesses to plan for success
If you’re a business owner reeling from the threat of a monster rates rise, don’t keep it to yourself.
That is the advice from Forth Valley Chamber of Commerce chief executive Michelle McKearnon, who told the Falkirk Herald: “As part of the wider Chamber network we have been looking at how we can prepare members for the change in business rates, as many organisations are being hit hard by the increases.
“We have been lobbying Scottish and UK government. We know that many local businesses are struggling to cope with this increase, along with other financial demands.
“Contact us, or your local MP, and make sure your concerns are voiced. Government need to listen very seriously to the people who are driving the economy – our local businesses!” She added: “With every business rates revaluation, there are winners and losers, however the extent of the impact of this year’s revaluation on some businesses has been enormous – one business has reported to us that its rates bill is set to soar by around 250 per cent in April.
“Such short notice increases in rates bills are impossible to plan for and will be exceptionally damaging to businesses at a time when many were already forecasting rising cost pressures and narrowing profit margins. We would urge every business to check their new valuation on the www.saa.gov.uk website and, if they have reason to believe that the valuation is inaccurate, they should take immediate steps to appeal it.”
She echoes the national perspective of parent body Scottish Chambers of Commerce, which points out that the consequence of smaller firms paying no rates is that a heavy burden must fall on larger firms which do.