Global real estate advisor CBRE is urging the Scottish Government to reconsider the introduction of a section of the Non-Domestic Rates (Scotland) Act which will remove Scottish businesses’ rights to lodge rating valuation appeals based on economic changes.
Brian Rogan, Head of CBRE Scotland’s Rating team, said: “These are unprecedented times, and the difficulties impacting almost every sector of the property market are acute.
“It is now absolutely clear the COVID-19 pandemic is having devastating economic consequences for very many of our client ratepayers and for tens of thousands of other Scottish ratepayers.
“In the wake of this ‘economic emergency’ we’re asking the Scottish Government to urgently reconsider the introduction of Section 13 of the Non-Domestic Rates (Scotland) Act 2020 which is due to commence on 1st April 2020 and will remove Scottish ratepayers’ rights to lodge and successfully prosecute material change of circumstance valuation appeals predicated on ‘economic’ changes.”
CBRE has consistently contested the reasoning behind the abolition of these valuation appeal rights on the basis they are grounded on flawed logic which is detrimental to businesses the length and breadth of Scotland. Nevertheless, despite CBRE’s advice and the conciliatory amendments tabled during the passage of the Bill by the Conservative Party, the policy continued to be promoted in Parliament by the Scottish Government.
Brian continued: “In light of the economic emergency caused by the COVID-19 pandemic, the rationale for Section 13 of the Act is shown to be indefensible and its introduction must be halted immediately. Scottish ratepayers deserve better than to be told by Assessors that nothing can be done to alleviate the devastating change in their economic circumstances caused by COVID-19 because the economic impact it has wrought no longer qualifies as “material change of circumstances” for statutory valuation purposes.
“COVID–19 is wreaking economic havoc which we have not seen in peacetime. By repealing, or not proceeding with, Section 13 of the Act all Scottish ratepayers impacted by COVID-19 would be able to seek a degree of immediate rate relief through the material change of circumstance valuation appeal process and/or through Assessors unilaterally applying reduced valuations through their existing statutory duty to amend the valuation roll when a material change of circumstances has occurred.”
On the 14th March 2020, the Scottish Government announced measures contained within a £320million relief package aimed at assisting businesses during the onset of the COVID-19. This has now been further enhanced by provisions that mirror those pledged by the UK Government.
Brian commented: “We acknowledge the Scottish Government has intervened with relief packages for some sectors but these can only kick in from 1st April 2020 whereas a material change of circumstance valuation amendment could help any Non-Domestic property ratepayer affected by COVID-19 immediately.
“COVID-19 is an existential threat to thousands of businesses across all sectors and geographies of our country and Section 13 of the Act will take away a critical lifeline which those businesses should be entitled to grasp to help them through this unprecedented crisis.
“We’re calling on the Scottish Government, on behalf of our ratepayer clients and the many other ratepayers in Scotland, to reconsider this policy and not proceed with the introduction of Section 13 of the Act.”
In addition to the issues around the introduction of the bill, CBRE is urging businesses to submit appeals by the 31st March 2020 deadline.
Brian said: “It is our opinion that businesses with properties in Scotland affected by issues surrounding the COVID-19 pandemic can submit appeals against their current rating assessments on the basis that COVID-19 is a material change of circumstances under the current legislation, but crucially they must submit appeals before 31st March 2020 to ensure validity of the appeal.”