The majority of companies in Scotland could be facing a steep rise in business rates with the upcoming rating revaluation, the country’s largest independent commercial property advisor has warned.
Ryden — which has offices in Edinburgh, Glasgow, Aberdeen, Dundee and also in Leeds — claims that commercial properties in Aberdeen look set to shoulder the heaviest rises, with the city’s new Prime Four business park development facing an increases of almost 70 per cent.
Other locations highlighted by an agency study include Edinburgh’s Quartermile development, facing a 20 per cent rate rise, and industrial properties at Dyce’s Wellsheads Crescent where the estimated hike could be over 45 per cent.
Across a different sector, the firm calculates prime retail properties in Aberdeen and Edinburgh could see rates up by at least 18 per cent.
Rating expert, Tim Bunker, explained Ryden had analysed how sectors and regions will be affected by the revaluation, the process that determines business rates. “Bills are calculated using rents at a particular period in time,” he said.
“Current rates are based on rents in 2008 and the five-yearly rating revaluation process, which sets bills, was postponed from 2015 until 2017.
“The recession and its effect on rents impacts on each sector and region differently. Many businesses would have seen their rates bill decrease this year, if the revaluation had gone ahead in 2015 — but now they might end up with less of a reduction,” he said.
“Our research tells us that those facing substantial rises in rates are prime Grade A offices across the country, along with most commercial property in the Aberdeen area.
“Of course, it’s bad timing for the city, because future bills will be based on 2015 rents which reflect rental increases over the last two years,” added the Ryden partner.
The Scottish Government raises £2.6bn annually from commercial rates. The BP Oil Terminal at Mossbank, in Shetland, has the highest rates bill of any individual Scottish property at £8.3m.
The Ministry of Defence has the second highest bill for the naval base at Faslane, with annual rates totalling £6m. Edinburgh and Glasgow airports are also among the top payers, with their bills amounting to £5.8m and £4.9m respectively.
“Talks of overhauling the rates system to assist businesses while maintaining fiscal neutrality mean that the substantial revenues lost through rates would have to be passed from business to the public,” Bunker said.
“I very much doubt that most people would accept — or could afford — their council tax bill being doubled.”
Source: Ryden Press Release
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