By Scott Wright
THOUSANDS of Scottish firms have been “left in limbo” because of a backlog in business rates appeals, sparking fears that failure to fast-track the system could tip many over the edge.
The dramatic change in trading circumstances sparked by the pandemic has led to more than 50,000 material change in circumstances (MCC) appeals being lodged with assessors.
However, it is understood all of those appeals remain outstanding, and have been heaped on to a backlog that was already facing assessors before the crisis took hold.
The Scottish Government this week pushed back the next revaluation of business rates by one year to April 2023, but experts at property firm Colliers International fear this will be too late.
Louise Daly, associate director at Colliers, who leads the Colliers rating team, urged for action now to deal with the backlog. Ms Daly told The Herald that businesses need assessors to “proactively” alter property valuations to reflect the huge change in circumstances the Covid crisis has brought, “rather than going through the appeals” process.
Ms Daly said: “They tinkered around with the revaluation, but that will not help businesses now. Businesses will not survive [if they have to wait to 2023].”
Ms Daly said none of the MCC appeals have been dealt with, noting that assessors have until March next year to respond to them.
Alongside action by assessors, Ms Daly suggests the Scottish Government should make an early decision on whether the current one-year holiday from business rates, given to retail, hospitality and leisure businesses as part of emergency support measures, should be extended.
That relief is due to expire on April 1, 2021,but Ms Daly said businesses need to know now to provide visibility on fixed costs, particularly with the furlough scheme coming to an end.
Ms Daly said: “Thousands of Scottish businesses are being left in limbo, urgently looking for clarity. Ratepayers cannot wait for another revaluation to happen in 2023. There is a need to reflect the material change in circumstances as soon as possible.
“Businesses need to know what their liability will be, or they could be forced into making ruthless decisions, such as branch closures and job cuts, in preparation for the increased costs they will face.”
She added: “The Scottish Government has a key role to play by making an early commitment to extend reliefs to allow businesses to budget accurately. With business rates relief in the worst-affected sectors, such as retail and hospitality & leisure, currently set to be removed in seven months’ time, liability will increase from 0 per cent to 100 per cent overnight.
“Assessors must take action now to deal with the biggest, most significant MCC likely to occur in our lifetime.”
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