Draft figures for the upcoming business rates revaluation show a mixed bag for Aberdeen but nobody in the city really wins, according to an expert at property firm Ryden.
Marks and Spencer (M&S) is among those expecting a fall in their rates bills next year.
M&S’s anchor store in Bon Accord shopping centre is likely to see its rates slashed by around 51%, from around £523,000 to about £254,000 annually.
The empty John Lewis department store is in line for a cut or more than 57%, saving its owner – who called time on the business during 2021 – nearly £250,000 a year.
Lorna Greig, who leads Ryden’s rates team in Aberdeen, said the severe impact of the previous revaluation in 2017, which left many firms with much bigger bills, means businesses benefitting this time are simply gaining from a “readjustment” of the system.
It’s “still early days” in the process and further analysis is needed to sift through a “minefield” of what all the newly published draft rateable value figures mean, she said.
But she added: “I don’t think anyone is a winner in Aberdeen.
“What we are seeing just now is a readjustment for businesses that have been overpaying and continue to do so.”
The draft values are “not set in stone” but suggest there will be a redress for offices in 2023-24, with those in the west end enjoying the biggest benefit, Ms Greig said.
Rates in some industrial zones in Aberdeen are “down but not be as much as I would have liked to see”, she added.
Ms Greig said she was “uncomfortable” with the values in some industrial locations.
Licensed premises are “a bit of a mixed bag”, with some in line for substantial reductions in their business rates, while others are facing a “massive” increase, she said.
“No cognition will have been taken of Covid” and its impact on this sector, Ryden’s ratings expert added.
On retail premises, she said Ryden didn’t have many clients in the sector so she would “reserve judgement” for now.
Aberdeen Football Club may see its rates increase from £192,500 a year to £450,000 under the draft assessment, despite another loss-making year in ageing premises.
City centre bar Revolucion de Cuba is facing a rise of about 222%, from £60,000 to £190,000.
The poundage rate used to calculate the bills that will land on firms’ doorsteps in the next tax year is expected to be announced in the Scottish Budget on December 15.
Currently, 49.8p is charged for every pound of rateable value.
Final rateable values will be published on April 1.
Business owners, tenants and occupiers, or their agents, wanting to challenge the figures will have four months to lodge revaluation proposals with the rates assessor.
Ms Greig urged businesses of all kinds to seek expert advice and also backed widespread calls for a freeze in the poundage rate next week.
Assessor ‘might not have got it all right’
Stuart Johnston, Aberdeen-based partner of chartered surveyors DM Hall, said: “While there have been some surprise increases, there are many that are benefitting from lower rateable values – which will result in significantly lower business rates bills in April 2023.
“West end offices and properties such those occupied by M&S on Union Street can expect a significant decrease, in many cases of as much as 50%.
“The assessor might not have got it all right and there will be many in the hospitality industry in particular that will look to challenge the draft rateable values that have been issued.
“But, on balance, there will be many businesses across the city that will benefit from this long overdue revaluation.”
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