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Business rates update: Guide to applying for business rates cap/appeal

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It doesn’t seem so long ago that the Scottish Tourism Alliance (STA), British Hospitality Association (BHA) and Scottish Licensed Trade Association (SLTA) started our campaign to lower the rate of the business rates increases, resulting in the announcement of a one-year cap of 12.5 % (Real Terms) by Finance Secretary Derek Mackay on February 21.

The Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2017 was approved on 16 March and came into effect on 1 April.

Thanks to our loyal members and supporters, the STA was able to dedicate considerable time and resource to challenging the proposed business rates increases and save tourism businesses all across Scotland a significant amount of money, some of which we now see being invested back into the STA through our membership renewals.  

It is this funding and your support that enables our voice to be heard (and listened to) at the highest levels and which ultimately helps your business to save money, grow and become more profitable.

A quick glance at the calendar shows the announcement was made just over 3 months ago, which means that if you’re appealing against your new business rates level, the deadline isn’t so far away now.  

 

There are only 4 months left before the deadline to appeal - closing date 30 September 2017.

 

 

Guide to appealing against business rates level

 

You are perfectly entitled to appeal against your new RV, if you think it is higher than expected. Businesses have only six months to lodge an appeal from 1 April to 30 September 2017.

The vast majority of appeals are resolved through informal discussions. 

All appeals should be resolved by 31 December 2020. 

Decision can be appealed to Lands Valuation Appeal Court in Edinburgh. 

Complex appeals are handled by the Lands Tribunal for Scotland.

Contact your local Assessor in the first instance as any query or dispute may be capable of resolution without making a formal appeal. You can ask how your properties have been classified (refer to the 2017 Practice Note). If you didn’t submit a revaluation Return of Information form in 2015, you will be asked to do so. The basis of any appeal will be values at or around April 2015. 

Appeal Process 

Go to the Portal (https://www.saa.gov.uk). 

Submit a simple online form, which will be acknowledged by the Assessor. 

The last date to appeal is September 30th 

Appeals will not be looked at until then

All appeals will be looked at together, regionally

All appeals will be addressed within three years (31st December 2020)

Appeals can be dealt with quicker by request from the Valuation Appeals

Committee (VAC)

The Assessor may agree that your circumstances are such that an amendment can be made and the RV will be reduced. Alternatively, they will state why they believe the RV is correct and it will be upheld. 

If you are not happy with this, it will go to the VAC

There is scope to amend the RV: 

- Assessors can make allowances for disadvantages (things that will significantly impact on the enjoyment of the property,). 

- They now have more flexibility to assess allowances, having increased from +/- 10% to +/- 20%. 

- It could be argued that connectivity (mobile, broadband or infrastructure) is a disadvantage and could have a negative allowance attributed to it. If you believe this to be an issue, you can ask the Assessor to revalue the property. However, in the best locations, this would probably not result in a value alteration. 

It is unlikely that an appeal on the amount of increase of the RV alone will succeed as the Assessors have figures to back up their general rate of increase. If there is a material change, which affects the enjoyment of the property (a factory is built opposite the property), you can appeal at any time. 

If a new-build property is established next door and you find yourself with competition, that is a matter for the next revaluation. All appeals will dealt with concurrently and a view will be taken on all of the appeal issues identified in each Assessor’s region. 

If the rate per guest place for a particular class and location is adjusted, any properties near by that also appeal may also be adjusted. There is no requirement to go to the Valuation Appeal Committee. Through negotiation, it is quite possible to reach an agreement, or at least the Assessor can explain how the RV was reached. 

There is no requirement to instruct a lawyer or chartered surveyor. The appeal process is simple. Beware of cold calling companies selling their services to amend the RV, especially those asking for payment up front. If a property falls just above a SBBS threshold, these owners may be targeted first. 

If a case goes to Committee, they would also look at the area as a whole. If they find a flaw in the analysis, the appeal will be upheld. The Valuation Appeal Committee (VAC) is made up of lay people (teachers, accountants, lawyers). 

There is no cost in taking a case to the Committee. The VACs are open to the public. It is a quasi-judicial hearing, but formal representation is not a requirement. The most important element to consider if you decide to go to Committee is to be fully prepared (and perhaps attend a VAC to know what to expect). If you disagree with the Committee’s decision, the last port of call is the Land’s Valuation Appeal Court. This will only happen if there is a point of law to consider that is contentious.

The Lands Tribunal for Scotland is another recourse.  It only applies to extremely complex cases. You have to apply to the Committee to take it to this level, and the Assessor can object. Any Land’s Tribunal case (of which there are few) becomes a test case.

The whole rating system is subject to the Barclay Review, reporting in the summer of 2017.

 

 

Business Rates Cap – applying for Rate Cap Relief

 

The Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2017 is the Statutory Instrument was approved on 16 March and came into effect on 1 April. Rate-payers will have to apply for the 12.5% rate cap. The scheme is a Transitional Relief Scheme so there will be a calculation done to determine if the Ratepayer qualifies. 

Claiming the relief is down to individual businesses contacting relevant local authorities. 

The full legislation can be read here

Guidance on applications for relief

(1) An application for relief must be signed by the ratepayer or a person authorised to sign on behalf of the ratepayer, and—

(a) “person authorised to sign on behalf of the ratepayer “means, where the ratepayer is—

(i) a partnership, a partner of that partnership;

(ii) a trust, a trustee of that trust;

(iii) a body corporate, a director of that body; and

(b) “sign” or ”signed” in relation to an application made by electronic communication means an electronic signature, as defined in section 7(2) of the Electronic Communications Act 2000(1).

(2) An application under paragraph (1) must be made to the local authority by—

(a) addressing it to the authority; and

(b) delivering it or sending it to the authority’s office by post or electronic communication.

Businesses which are eligible for full relief under the Small Business Bonus Scheme are unaffected by the cap but are not liable to pay rates. 

Businesses with RV between £15k - £18k will benefit from 50% relief in addition to the cap.

The legislation covering the Transitional Relief Scheme has been laid down by the Scottish Government, and as such it would appear that all councils will be following the same procedures. 

 

IMPORTANT: The rates cap does not come automatically.  

Some local authorities have already placed application forms on their websites and it is understood that Scottish Government is preparing a template application for use by councils. The process will differ according to your local authority; some may request a letter, others will ask for a form to be filled in. 

 

We would urge you to contact your council finance department for more details on the rates cap applications process and to do so as soon as possible.  

 

The higher amount will be debited until such time the application has been processed and it therefore down to you to follow up and chase the claim for relief if it is not forthcoming within a realistic timescale.

 

The Scottish Tourism Alliance, the BHA and the SLTA will continue to work with Scottish Government and the Barclay Review to bring about a fairer, more transparent approach to the valuation of businesses within the tourism sector.

 

 

(Special thanks to the ASSC for sharing their information on how to appeal against your business rates level and for their further guidance on applying for the Business Rates Cap Relief).


Last Modified: Thursday 01 June 2017 08:58
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