City centre restaurants and Pittodrie Stadium face having to pay hundreds of thousands of pounds more in business rates from next year in a move regional bosses have described as “madness”.
Draft revaluation notices due to take effect on April 1 2023 have revealed bad news for businesses across Aberdeen city centre, with one bar and restaurant facing a more than three-fold increase in business rates from April next year at a time when hospitality businesses are already facing extinction due to the cost-of-living crisis.
Aberdeen Football Club’s stadium could see its rates rise from £192,500 a year to £450,000 under the draft assessment, despite having booked another lossmaking year in its increasingly aged premises.
Inconsistency
The figures are calculated using the draft non-domestic rates valuation roll published on Wednesday.
And while some expect massive increases, others have seen big drops as critics pointed to a “lack of consistency” being applied to values – particularly in the city centre.
Analysis by Aberdeen and Grampian Chamber of Commerce (AGCC) has shown how one bar owned by Belhaven will pay more while another outside the city centre will pay less – a move that “risks holding back city centre regeneration”.
AGCC policy director Ryan Crighton has described it as “madness”.
He said: “There are some big drops in rateable values across Aberdeen, which is positive for a city which has had to suffer unfairly inflated rates for far too long.
“However, we have members who are very concerned about the lack of consistency which has been applied in the city centre, and we must see urgent action to address this.
‘Pain has not been forgotten’
The rates blow comes in the wake of the last valuation in 2015 which many believe say hit north-east businesses with unfair rates.
Prior to the latest draft valuations, AGCC policy adviser Fergus Mutch warned Aberdeen in particular had been “clobbered by an unfair rates regime over the past five years” and urged the Scottish Government to ensure business rates were imposed fairly.
He added: “The pain that north-east businesses went through during the last round of rates revaluations has not been forgotten.”
Union Street recovery under threat
Mr Crighton believes the future of Union Street is under real threat unless the Scottish Government steps in.
He said: “There is a huge community effort under way to bring new businesses to our flagship street – but its starting feel like we’re repairing the sails while poking holes in the hull.
“This risks holding back city centre regeneration and we would urge the assessor reflect reality when the inevitable appeals are launched.
“Following through with some of these would be madness.
“And as negotiations on rateable values now get under way, it is crucial that the Scottish Government retains current reliefs and freezes poundage.
“Anything less will threaten the future viability of many firms.”
Who could be paying more rates come April?
Today’s announcement has set ratable values which is a factor in setting rates bills in April.
However, the final rates bill will also be dependent on any changes to the poundage rate which will be determined in the Scottish budget this month.
Assuming no reliefs, Revolucion de Cuba, based in The Academy, is facing an increase of 222% with rates going from £60,000 in 2017 to £190,000 in 2023.
Mr Crighton said: “A number of hard-hit hospitality business will see their rateable value increase from April, including one city centre bar and restaurant which will see its RV increase from £60,000 to £193,000, an increase of over 200%.
“Another pub chain is seeing its rateable value jump 22% on Belmont Street but falling by 13% outside the city centre.”
Rates for the Belhaven Pub-owned Wild Boar could jump from £76,500 to £93,500 a 22% hike.
Meanwhile the Brig O Don, also owned by Belhaven and based outwith the city centre in King Street, could see a 13% drop decreasing from £74,000 to £64,500.
Government action
Federation of Small Business’ (FSB) Scotland policy chair Andrew McRae has reiterated the organisation’s call for continuation of the Small Business Bonus rates relief scheme and a freezing of the poundage rate in next month’s Scottish Government Budget.
He said: “Any increase on the rates our smaller operators will pay would be devastating and could force some into closure.
“Our research shows that the overwhelming majority of small businesses have seen their overhead costs increase this year, with one in six indicating that they are already considering shrinking, shutting or selling in the next 12 months.
“For the tens of thousands of traders who have enjoyed the relief the Small Business Bonus has provided, the prospect of revaluation or an increased poundage rate will be extremely worrying.
“That’s why we’ve called on Scottish Government to commit to freezing the poundage rate for at least the next 12 months.
“Against a backdrop of such turbulence, we must see targeted support for the small businesses who will find themselves being valued out of the Small Business Bonus Scheme.
“We also need to look at those hardest hit by sky-rocketing overheads, many of whom were also those most acutely affected by Covid, and whether the temporary Covid reliefs should be re-instated.”
Aberdeen Football Club and Revolution Bars have been approached for comment.
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