NE Scotland, Orkney & Shetland

Business rate increases 'could cripple hospitality industry'

Stonehaven Image copyright Colin Smith
Image caption Six hotels in Stonehaven will see an increase in their rates

Planned business rates increases could cripple parts of Scotland's hospitality industry, it has been claimed.

Some firms are facing rates rises of more than 100%, after new rateable values were given to their properties.

Firms in the north east say they are being particularly badly hit as their property values were assessed while the region's economy was booming.

Finance Secretary Derek Mackay is due to discuss the issue with business leaders in the region.

He announced a series of changes to business rates during his Scottish budget announcement in December.

In changes due to come into effect from 1 April, business rates poundage will be reduced by 3.7% to 46.6p.

Around 100,000 properties will be exempt from paying any business rates, under the small business bonus scheme - but many others are facing rises.

The Scottish Chambers of Commerce said they are receiving consistent reports from across the country of negative impacts of the move on hotels, restaurants and the licensed trade.

Scottish property values were assessed in April 2015 - before the downturn in the oil price - for the 2017 revaluation.

'Fully booked'

Since then hotel occupancy in the north east has dropped by up to 70%.

Sheila Howarth, who owns The Belvedere Hotel in Stonehaven, said her rates will rise from £22,750 to £47,000.

She said: "This time 18 months ago, I was turning people away. The hotel was fully booked all year round.

"Now it's dropped to 20 or 30% occupancy. In February, I only have two bookings. The rates rise will cripple my business I would have to look at my staffing levels, and whether it was viable to keep the accommodation side of the business open."

Six hotels in Stonehaven will see vast increases in their rates. They are meeting later to raise concerns with representatives from Aberdeenshire Council.

Finance Secretary Derek Mackay is due to meet with Aberdeen and Grampian Chambers of Commerce on Friday.

A Scottish government spokesman said: "Rating valuation of business properties is undertaken by independent assessors, funded by local councils, not the Scottish government.

"Each council retains all the business rates revenue it collects, and it is for councils to apply rates reductions, on top of existing statutory reliefs, as they see fit.

"Individual business rate payers can appeal their valuation via independent processes if they feel it is incorrect."

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