Borders firms in rates revolt

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THE owners of nearly 200 business properties in the region, clobbered with massive increases in non-domestic rates, are set to appeal their valuations at a series of forthcoming hearings.

Notable objectors include Stobo Castle Health Spa in Peeblesshire which last year was given a rateable value (RV) of £540,000, making it the highest-rated commercial premises in the region.

That hike means the firm, which employs 200 staff and is Scotland’s only destination spa, paid £225,000 in rates in 2010/11 and, with a marginally increased poundage, will fork out even more in the current financial year.

Last year’s rates bill was up £35,000 on the previous year – based on the 2005 valuation which put the hotel’s RV at just over £400,000.

The impact of the new rates, levied by the Scottish Government, on larger business properties in the Borders, was highlighted in these columns last year.

And the view of Steven Winyard, Stobo Castle’s managing director, that they represent an unfair burden on the region’s major private sector employers during a period of economic recession has not changed.

He confirmed this week that agents for his company will be formally objecting to the high RV placed on the hotel at a special sitting of the Tweeddale Valuation Appeals Committee (VAC) which will be held in Peebles on December 1.

Before that, similar VAC hearings will be held in Duns on November 10, Galashiels on November 17 and in Jedburgh on November 23 to consider RV appeals from property and business owners in Berwickshire, Ettrick & Lauderdale and Roxburgh respectively. The RV fate of 198 properties across the four districts will be determined at these sittings.

Ironically, many of the properties are owned by Scottish Borders Council, which last year voted down a Lib Dem motion urging the SNP government of the day to reverse its decision to abolish transitional rates relief for non-domestic rates which would have allowed businesses like Stobo to phase the increased payments over the next five years.

Instead, the majority of councillors supported the reforms of finance minister John Swinney, not least the decision to give many businesses a 100 per cent rate discount by increasing the RV threshhold from £8,000 to £10,000.

Mr Winyard said he would be pleading a “change of circumstances” in a bid to have his RV cut.

He said: “The 2010 valuations were based on median property rental values in 2007/08 which was when we enjoyed our peak year with a turnover of around £7million. But then, of course, came the recession, and by April 1 last year, when this huge increase was implemented, our turnover was down by 11 per cent and the pressure to keep down staffing costs was, and is, immense.

“Abolishing transitional relief, which would have given us the chance to spread the financial pain, now puts us at a disadvantage with our rival spas in England where rates hikes can still be phased. It is little consolation to know my business is financing other businesses which do not pay rates.”

Also appealing its valuation is John Swan Ltd which runs the region’s only auction mart at Newtown. That firm’s RV rose by 282 per cent from £64,500 in 2005 to £182,000 last year with its annual payment going up from £31,000 to £75,000.

“Our case will be that applying average rental values from three years ago to auction marts, which are all owner-occupied, is flawed and exacerbated by the loss of transitional relief given the competition we face from livestock markets south of the border,” said Swan’s managing director Jack Clark.

TheSouthern has learned that, out of the region’s 6,500 non-domestic rated properties, more than 1,400 appeals were lodged after the 2010 valuation. Statute decrees these must be heard by December 31, 2013, and more VAC sittings are still be arranged.

VACs consist of members of the local Valuation Appeal panel, members of which are appointed by the Sheriff Principal after consultation with “such persons as he sees fit”. The current panel chairman is Earlston businessman Disney Barlow. Each VAC consists of a chairman and between three and six panel members.