Small business owners in and around Aberdeen are among the biggest losers in a rates revaluation which has benefitted some of the city’s largest premises.
Seven out of 10 properties in the Granite City have had a decrease in their rateable value, while there is no change for 14%, and the remaining 16% were landed with rises.
M&S’s anchor store in Bon Accord shopping centre and the empty John Lewis department store is just two of the larger buildings facing a hefty drop in rates.
However, some business owners facing increases have reacted with disbelief at the figures with one calling it “disgusting”.
This year’s revaluation updates rateable values in the 2017 valuation roll for Scottish council areas.
From nothing to £8,000 rates
Former oil and gas manager Tom Giles launched his vehicle bodywork repair franchise Revive Auto Innovations! in April 2021 and has premises in Portlethen.
Previously his business came under the £15,000 small business rate relief threshold so faced no rates payment obligations.
But changes now see him faced with a £8,000 a year bill.
He said: “I purchased the building with part of my pension and rent it back to myself.
“But when it was sold to me the big selling point was that it was below rateable value because that’s a massive cost.
“Now it’s been regraded and it means I go from paying nothing annually to £8,000.
“My rent is £1,900 and electricity is another thing that’s crazy which is over £700 a month.
“That’s pretty much all my profit gone. There’s just no money at the end of the month.
“It feels like we are the small guys paying for the big guys.
“We are going to have to up our rates for customers. I just don’t see how else we can do it.”
Buildings will end up empty
Owner of West End zero waste store Refillosophy Gina Adie has branded the increase she is facing “disgusting”.
Like Mr Giles she also previously came under the rate relief threshold but was informed in November last year she was facing a £9,337 a year bill.
She launched an appeal but is still awaiting the outcome.
Reacting to today’s new figures she said: “It’s just disgusting.”
“It does surprise me but it shouldn’t because the rates should’ve gone down in Aberdeen because property values have gone right down.
“We are in a unique position in that it’s my husbands pension fund that owns the property so if I decide that I’m closing and leave the place empty then he’s going to be left with a property that’s unrentable.
“Who is going to want to take it one with the rates that they are. It’ll just be another empty building in the West End of Aberdeen that makes the whole place look sad and depressed.”
Expert view on rates revaluation
Eric Shearer, head of office at Knight Frank Aberdeen, said: “The reduction of the rateable value for so many properties is great news for businesses across Aberdeen.
“There are, of course, still those who will be on the sharp end of the changes and owners of listed buildings, in particular, are going to see their costs increase significantly with the removal of reliefs.”
Federation of Small Businesses local development manager Mike Duncan said: “It’s great to see that many Aberdeen businesses are benefitting from the recent business rates revaluation.
“If we cast our eyes back a few years to the 2017 revaluation process, Aberdeen businesses were hit particularly hard. The 2023 revaluation is perhaps just addressing the balance.
“We also can’t forget about the businesses that have seen an increase in their rates bill.
“There is an appeals process via the Scottish Assessors Association.”
Other areas in the region
Properties in Aberdeenshire have not fared as well as the Granite City in the latest revaluation – 48% had rises, 36% saw decreases and there was no change for 16%.
Moray was among the council areas worst hit – with 65% of properties seeing increases in their rateable value, 22% had falls and there was no change for 13%. A greater value attached to whisky distilleries in Moray explains why valuations there have risen more than most local authority areas.
At this year’s revaluation, the total rateable value on the Scottish valuation roll increased by £390million – a 5.36% increase.
As part of the New Deal for Business announced by First Minister Humza Yousaf, one of the projects being taken on by the advisory group is further reform of business rates.
