Scotland’s business rates system looks close to breaking point, judging by the soaring numbers of appeals.

Latest Scottish government figures show that the number of non-domestic property revaluation appeals in 2010 climbed to 67,024 – the latest year for which figures are available – compared with 54,808 in 2005.
This is extraordinarily high, and considering the effects of the subsequent recession and spate of shop closures, points to growing problems with the business rates system.
Says David Lonsdale, Director of the Scottish Retail Consortium, “This suggests the current business rates system is creaking in many areas and raises further questions about the sustainability of the overall rates system and whether it is fit for purpose”.
As at 31 December 2014 revaluation appeals have been resolved for 66,469 properties. As a result of these, the rateable value of properties for which appeals have been resolved has reduced from approximately £4,569 million to £4,348 million, a drop of £222 million in rateable value.
The Scottish Government currently has a consultation out on the narrow issue of Rates Appeals – they seem interested in charging a fee for each appeal submitted/lodged.
The consultation paper reveals that there are more than 220,000 non-domestic properties on the valuation roll in Scotland (referred to as ‘subjects’), including shops, offices, schools, pubs, hospitals, hotels and factories, along with many other properties that are not classed as domestic.
Says David Lonsdale, “The commercial property valuations currently used to determine liability for business rates were set way back in 2008, and therefore took no account of the subsequent recession and long period of stagnation which hit the availability of bank finance and consumer spending.
“This left retailers – who pay a quarter of all rates – and other firms, forking out huge sums in business rates while the economy was in a funk. Unfortunately retailers and other businesses are continuing to stump up huge amounts for a business rates system that is frankly no longer fit for purpose and which is holding back investment in our high streets.”

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