The Scottish Government has been warned the fragile hospitality sector will be plunged into crisis if it does nothing to halt huge business rate rises.
Leading entrepreneurs of Aberdeen’s night-time economy united to predict a recent run of closures will only accelerate if ministers fail to act.
They joined a chorus of employers demanding action by Finance Secretary Derek Mackay to soften the blow by phasing in the change.
The north-east faces exceptional hikes because bills from April are based on a 2015 revaluation – before the plunging oil price pushed many firms to the brink.
Several have said they may be forced to lay off staff if the rise goes ahead.
Ben Iravani will see rates payable on Ninety-Nine Bar and Kitchen treble to around £30,000 a year – and double at his other bar Orchid to £20,000.
“We are not going to close, but there are others that will because it will be the straw that breaks the camel’s back,” he said.
“From an entrepreneurial standpoint it is so demoralising. You risk a lot and you hope to see a reward come back at some point.
“If that reward just keeps getting taxed and taxed and taxed it’s not worth it.”
Mr Iravani said he “would certainly have reconsidered massively” about investing in the venues several years ago had the rates been that high.
It “would definitely help” if the government copied the system of reliefs used to cushion firms in England from sudden rises, he added.
Alan Henderson is concerned about the impact both as an employer and chairman of the Aberdeen Inspired business improvement scheme.
The bill for The Stag, the Crown Street pub he recently refurbished, will soar by a massive 259% – from £10,842 to £38,911.
“It’s a horrendous shock. The hospitality sector is going to be hit the most,” Mr Henderson said.
“We have been hit really, really hard but we will be OK. I think there will be lots that are not.
“It does mean we are less likely to give staff big wage increases.”
He welcomed the concerted push to press the government.
“What’s quite clear is that the whole political and business community for once in my life seems to be coming together.”
Their fears were echoed by Paul Clarkson of PD Devco, which operates 11 venues across the city including Soul bar and casino.
He is still calculating the full scale of the impact on their operations but one bar will see rates rise by more than a third.
“This is going to have a considerable impact. Hopefully it’s not something that will cause lasting damage to the business.
“A lot of places will go to the wall.”
Ministers have so far given no indication they are willing to protect firms from the sharpest rises – despite the north-east facing the second highest increases anywhere in the UK.
Bev Robertson said she was “flabbergasted” when it was revealed her small engineering firm was being told to pay another £15,000-plus a year from April – a leap of 57%.
Finance director Mrs Robertson and her business partners have built up Precision Oil Tools in Kintore over 13 years and now have a staff of 12.
The dramatic slump in the oil price saw them make a loss for the first time last year however and the rate shock has left them desperate for help.
“We have cut back and cut back and cut back already. The guys took a cut in hours last year to avoid redundancies,” she said.
“We have spent everything we’ve built up just keeping the lights on.”
In a letter to local politicians, she said the tax bill was “nothing short of daylight robbery”.
“Unfortunately we have already cut our cloth so many times I believe that the only thing left for us to do will be to cut our staff numbers.”
She added: “It’s not something I want to do but if things do not pick up we can’t take money from nowhere.”
