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Business rates cap a “less generous than promised” bureaucratic nightmare, say bosses

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An angry hotelier has accused ministers of “sharp practice” over claims a business rates help package is less generous than promised.

Some firms facing crippling rises were promised by the Scottish Government that their bills would not go up by more than 12.5% last year.

The cap for the hospitality industry and north-east office space was conceded by Holyrood in February after weeks of intense pressure.

But bosses have now discovered that because officials have allowed for inflation, bills will rise by up to 14.75% in cash terms.

And businesses have also found out they will not automatically get the discount but must apply to their local council after receiving the full bill.

The government insisted European state aid rules meant it had no choice but to require applications.

But Aberdeen and Grampian Chamber of Commerce said the additional bureaucracy and squeeze on finances were “very disappointing”.

“This will leave businesses having to ‘cashflow’ for the rates increases until discounts are applied and this also creates more red tape,” it said. And City council finance convener Willie Young claimed the “farcical” approach was a deliberately seeking to minimise take up.

“They are doing it because they think some people will not apply. They are complete political chancers,” he said.

Bills are due to be issued in mid-April with rates-payers liable for the full amount while they wait to hear if they qualify for a cap.

Many also face submitting appeals against the revaluation itself at the same time.

Banff Spring hotel owner Charles Milne urged fellow bosses to refuse to pay anything more than the capped amount.

“This is nothing short of sharp practice on behalf of the government,” he said.

“The assessors know every square inch of the businesses and could simply apply the cap.

“This bureaucracy will leave businesses with serious cashflow problems and a great level of uncertainty.

“I would urge people to stand up and only pay the capped amount.”

Lindsay Wilson, who runs the Eat on the Green restaurant in Udny Green with chef husband Craig, said: “This process is clearly arbitrary and outdated and the sticking plasters from Holyrood are not going to save the lives of countless businesses that will die as a consequence of ill thought-out penalties that don’t reflect affordability.”

A government spokesman said the cap “must be an application based scheme to comply with European Union State Aid rules and to ensure eligibility for the relief”.

The scale of the cap had always been clear,” he added.

“The rates cap announced by the Finance Secretary was 12.5% in real terms.”

AGCC research and policy director James Breem said: “It is important that when announcements are made they are clear and transparent so that businesses can plan properly.”