PRESIDENT Trump’s Turnberry golf resort has been hit by a 30 per cent increase in business rates after the Scottish Government withdrew tax relief from the venture.
The property tax bill for the luxury venue in Ayrshire soared to over £834,000 after Ministers redrew the eligibility rules which meant that the firm just lost out.
Murdo Fraser, the Scottish Tory shadow finance secretary, said: “The SNP Government should not be basing policy on whether or not they like the business owner."
Turnberry, which has hosted four British Open championships, was purchased by Trump in 2014 and the hotel was reopened two years later.
Although the President has no involvement in running Trump Turnberry – his son Eric is in charge – it is ultimately owned by the Donald J Trump Revocable Trust.
It emerged last year that businesses throughout Scotland faced large increases in their non-domestic rates bills – a property tax – following a revaluation.
Criticism by the business community prompted the Scottish Government to introduce a transitional rates relief scheme, which limited the rises for hospitality-related properties such as hotels, pubs and restaurants.
However, Ministers were believed to be unimpressed after it emerged that Trump Turnberry benefited financially from the scheme.
It was reported that the resort received tax relief of around £110,000, but in fact the total value of the reduction stood at £168,052.
The Scottish Government tweaked the eligibility rules so that relief could only be granted to businesses with a rateable value of up to £1.5 million. Trump Turnberry’s figure stood at around £1.6m and missed the cut.
It is understood the Government’s rethink was taken with Trump Turnberry in mind and the venue's original tax relief was a factor behind the new rule.
The financial impact of the tweak on the golfing venture was unclear at the time, but the Herald on Sunday has obtained figures showing the cost to Trump Turnberry.
In 2017/18, the iconic destination was charged £811,800 in business rates, but transitional relief of £168,052 – worth around 20 per cent of the total – left a final liability of £643,747.
In the current financial year, a rise in the poundage rate increased the Turnberry bill to over £834,000, but no relief applied.
Trump reportedly purchased Turnberry for around £36m and it has been estimated that around £140m has been spent transforming the venue.
However, despite the multi-million pound revamp, it has not made a profit since the acquisition. According to the 2016 accounts of Golf Recreation Scotland, which owns the course, the firm ran up a £17.6m loss.
Speaking to the Herald on Sunday, Trump Turnberry General Manager Ralph Porciani said: “I find it staggering that they would shape Government policy on rates around one property.”
He said the firm’s initial finances should be seen in the context of the resort being closed for nine months from autumn 2015 onwards.
He added: “2018 is really our baseline year to start making Turnberry a sustainable business.”
He also stressed the importance of the resort to the Ayrshire economy and said the firm was forecasting growth of 23.9 per cent this year. Porciani added that there are 378 people on the payroll, worth around £7.4m in wages.
He said he did not believe the rates increase would affect jobs, but said it could impact on the sales and marketing budget. He also said he would have liked more help on rates when the resort had been closed.
Fraser said: “It would be churlish in the extreme for a responsible government to behave in this way. At the end of the day, Turnberry is a major employer in the area, and an important part of Scotland’s tourist industry. That should be the consideration when tailoring business rates policy, not SNP strops about Donald Trump.”
Former SNP MSP Chic Brodie, who used to represent the south of Scotland at Holyrood, said: “We should be attracting money into Scotland and becoming attractive to flagship organisations. Having a predilection against a particular employer is not helpful. Setting business rates policy should be devoid of personality issues.”
In July, it was revealed that the US Government paid more than £50,000 so that the President could stay at Turnberry for a “working visit”, which included rounds of golf.
Federal spending records showed that payments worth £52,477 were made by the State Department to SLC Turnberry Limited, which is owned by Golf Recreation Scotland.
A Scottish Government spokesperson said: “Our current Transitional Rates Relief Scheme is expected to save businesses over £15 million across 5,500 eligible properties this year. In total we provide the most competitive rates relief in the UK, worth around £720 million, including the Small Business Bonus Scheme, which alone lifts 100,000 properties out of rates altogether.
“These progressive measures we are taking, combined with the powers and investment we have provided to local councils, means a good deal for businesses, a good deal for public services, and a good deal for the Scottish economy.”
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