RATES UPDATE It’s been a year since we last picked up the hot potato that is the rates system in Scotland, and in light of the Scottish government’s proposed non-domestic rates bill re-heating the issue, we figured it was time for an update. JASON CADDY reports.
L
ife sucks. But does that mean you should just suck it up small businesses employ the majority of people in Britain, so when you’re getting a raw deal? Like when licensees in the they need help, everybody knows that the hospitality sector is UK, according to a recent report by Oxford Economics, abused by the rates system. It’s a hard shift running a business pay around 4% of their turnover in business rates alone, more right now. I personally responded to my rates assessor and than any other sector. Pubs pay 2.8% of the total business this was dismissed. Then I was pointed in the direction of the rates bill while accounting for just 0.5% of rateable turnover – Scottish government. I spoke to my MSP and she said leave it an overpayment of £500m. until the Barclay Review comes out!” There are signs that politicians are waking up to the iniquity of “Look at it this way, supermarkets are better off than licensees. the rates system. In her Programme for Government 2018They are not rated on the alcohol that they sell, yet they sell 19, released just last month, Nicola Sturgeon underlined 80 per cent of alcohol in Scotland. Pubs meanwhile are tied the Scottish Government’s ambition for the economy, to a system that is 100 years old. There’s nothing in it for the including a proposed non-domestic rates bill, based on the powers that be to dissolve this. Their policy is a protectionist recommendations of the Barclay Review to ensure a ‘level one around alcohol being a dangerous drug from which we playing field.’ must all be protected” Said the report, “The Bill will deliver the ambition set out in the Meanwhile, Chancellor Philip Hammond has been invited on a Barclay Review to enhance and pub crawl by an MP in his English reform the business rates system constituency so that he can in Scotland to better support experience some of the struggles The Non-Domestic Rates business growth and long-term faced by small pub owners. (Transitional Relief) Amendment investment and reflect changing Hammond said he was ‘very (Scotland) Regulations 2018 marketplaces...It will also deliver tempted’ but he’s yet to agree. extended transition relief measures to increase fairness UKHospitality and a coalition of arrangements into 2018-19 and ensure a level playing field leading hospitality businesses for hospitality properties and by reforming a number of reliefs have also written to Hammond and tackling known avoidance to call for targeted support in Aberdeen City/ Shire offices measures.” this month’s Budget that will with an additional 12.5% But some in the trade remain protect the valuable economic real terms relief. Hospitality wholly unconvinced that anything contribution the sector makes properties must have a will change, like Ian Gibson, to the UK. But even if he acted, rateable value under £1.5 licensee at Platform 3 in while representing something million to qualify. In Scotland, Linlithgow. He said, “I had big of a shift, Scotland wouldn’t be your local assessor works out hopes for the Barclay Review. affected directly. your rateable value. Despite it being headed by a So what would make the system banker and ex civil servant and fairer in Scotland? Is there any nobody from either the retail room for optimism here? Said sector, not even someone from a Douglas Harrison of the Lion pub group or a hotelier, it still had every opportunity to reform Hotel in Nairn. “The latest from the SLTA is that they are in the whole thing. It could have solved it all in a oner.” communication with the Scottish government about this and, “Then again what would a banker know about rateable values. as long as there’s a dialogue, I guess that we can still live in It was a joke. I have also heard that some government hope. Yet nothing that I’ve read or heard so far leads me to be ministers were actually embarrassed about it. I wrote a desperately optimistic.” 4-page submission over and above the questionnaire and I “Of course, the best way to make the system fairer would be got nothing back other than an acknowledgement to say that to assess licensed premises, as they do with retail premises. they’d got it. I have been through the entire archaic system It’s as fundamental as that. When you’re faced with a £10k bill and it hasn’t helped me one bit.” and the operator next door is paying £2k, something is gravely He continued, “Your rateable value determines what you pay to wrong and licensees are going to continue to question exactly Sky, your water rates etc. They all compact to haunt you, plus how they arrived at these figures unless something gives.” n
14
DRAM OCTOBER 2018