Transitional rates relief: what you need to know

Property consultancy firm Gerald Eve is the SLTA’s rates consultant. The company’s Martin Clarkson provides an update.

New rateable values which came into effect in April have prompted a flood of applications for a rebate of up to 12.5% plus inflation offered by the Scottish Government.

Martin Clarkson of Gerald Eve said: “The 12.5% cap plus inflation, which is 14.75% in real terms, announced by the Scottish Finance Minister Derek Mackay, has now been set in law and limits increases in rates payable between 2016/17 and 2017/18 to a multiplier of 1.1475 for qualifying properties. Qualifying uses include pubs, hotels, guest houses and restaurants.

“Under EU state aid rules there is a limit on the amount of total relief available to a single owner/operator, whether of a single property or combined across several properties, of approximately £170,000 in any three-year period.

“The relief has to be applied for and each council has the responsibility to administer the relief.”

Most councils, said Clarkson, now enable applications to be carried out online while some are posting information to ratepayers directly. But he added: “A small number worryingly still have no process in place so ratepayers are encouraged to contact the billing authority if they believe they are entitled to the relief.

“There will likely be a time lag between applications being received and the relief granted through adjusted bills,” he continued. “Some authorities are offering reduced direct debits until applications are confirmed. “In general, if the rateable value of a qualifying property has increased by 19% or more, then the relief should apply (subject to the EU limits).”

It must be remembered that the cap only applies, at the moment, for one year.

 The SLTA is urging members in the “strongest terms” to continue to appeal against their new rateable values. This must be done by September 30. If a business does not appeal within this six-month period your appeal rights may be lost until 2022.

 Martin Clarkson BSc MRICS is a Partner at Gerald Eve LLP

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