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North-east hotelier says rates rise threatens business and could kill industry

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A hotelier has warned First Minister Nicola Sturgeon that the imminent rise in business rates is threatening not only his future – but the whole hospitality industry.

Charles Milne, owner of the 36-bedroom Banff Springs Hotel, is facing an “incredible” 115% in the rateable value of his establishment which throws its future into doubt.

He joined the chorus of complaints as it emerged that under-fire Finance Secretary Derek Mackay has agreed to a showdown on Friday with furious north-east bosses.

Aberdeen and Grampian Chamber of Commerce said it hoped he would offer Scottish Government help to cushion the “potentially devastating impact” of the rises when he comes to the Granite City.

The rateable value of the hotel on Banff’s Golden Knowes Road will jump from £92,000 to £197,000 on April 1.

In his letter to First Minister Nicola Sturgeon urging her to review the rates proposals, a “dismayed” Mr Milne outlined the potentially grave consequences they could have.

He said: “This huge increase will result in impossible trading conditions and will affect our ability to maintain the staffing levels and investment in the fabric of the hotel.”

Mr Milne currently employees 66 full and part-time staff at the hotel which was rescued from receivership seven years ago.

The impending rise in rates would need the Banff Springs Hotel to bring in £1,200 more in profit each week to cover the increased cost.

“We have worked tirelessly to build the business up and provide historic Banff with a hotel up to today’s standards, encouraging visitors to stay over and support the local tourists attractions and business communities,” he said.

“I cannot simply walk in and double the price of haddock and chips or increase the price of a bride’s wedding by £1,000 overnight.”

Many weddings at the Banffshire hotel are booked months or years in advance and prices cannot be increased at short notice.

Last night Mr Milne said the Scottish Government was lumping “massive increases” on local businesses in Aberdeenshire, forgetting that hospitality benefits from the oil boom ended 20 months ago.

The increased rates are based on valuations carried out when the region’s economy was booming.

He added: “What planet does the person implementing these charges live on. It is certainly not Scotland as we are all canny enough to understand that this is a disaster in the making.”

The hotelier joins a growing chorus of north-east entrepreneurs and business people calling on the Scottish Government to soften the blow of the rates rise on the region.

Prominent figures across all sectors have united to urge Finance Secretary Derek Mackay to phase-in the changes rather than making one fell swoop on April 1.

But last night a spokesman for the Scottish Government said Mr Mackay will visit Aberdeen on Friday to discuss the issue with the Aberdeen and Grampian Chamber of Commerce.

The 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 rate payers can appeal “incorrect” valuations, but this will not come into effect until after the new payments are due.

The spokesman added that the government has announced a “package of action” to lift many properties out of rates completely and that significant investment is being made in the north-east, including the multimillion-pound Aberdeen City Deal.

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