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Business rates: MSPs pass controversial revaluation plans

North East MSP Liam Kerr says the area has already been hit by punitive rates.

A plea to fix “crippling” north-east business rates has been rejected by Holyrood, after SNP MSPs voted to delay revaluation by a year.

Business leaders have attacked Scottish Government plans to postpone revaluation from April 2022 to April 2023 on the grounds that the delay will result in rates not reflecting the impact of the coronavirus crisis quickly enough.

Despite their pleas, a majority of 65 MSPs backed Nicola Sturgeon’s administration’s plans when they were voted on at Holyrood.

Before the motion was passed, North East Tory MSP Liam Kerr spoke against the delay, arguing that the area had already been hit by punitive rates.

Business rates north east

Mr Kerr said the last revaluation, which was introduced in 2017 and based on a 2015 valuation, had failed to take into account the decline in the oil price on firms in Aberdeen and the surrounding area.

“Business rates bills were based on rateable values that failed to reflect the reality of trading in the north-east when they came into force in 2017,” Mr Kerr told MSPs.

“North-east businesses have been paying the eye-watering rates ever since. Businesses in the north-east cannot wait any longer. You just need to walk down Aberdeen’s Union Street to see the impact of such crippling and inaccurate Rates on this great city.”

Effects of pandemic

But Finance Secretary Kate Forbes said it would be “irresponsible” for the Scottish Government to proceed with 2022 revaluation based on information at April 2020, when Scotland was just a month into lockdown.

Ms Forbes argued the original plan would lock businesses into revaluations that did not reflect the impact of the pandemic.

“These regulations are based on an understanding of the risks to businesses which is, in turn, based on the most robust and verifiable evidence and data that we have,” Ms Forbes said.

But business leaders have argued that a revaluation based on valuations carried out on a “tone date” of April 2021 could be introduced the following year.

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