Scottish businesses disadvantaged by new rates appeal rules - Louise Daly

The new and arduous appeals process is putting many Scottish businesses at a disadvantage when it comes to their business rates.

According to the Scottish Assessors’ report, following the recent 2023 Revaluation, receipt of only around 20,000 proposals have been lodged challenging the values set at the Revaluation – a significant reduction compared to the number lodged at the previous 2017 Revaluation when 73,900 valuations were appealed. We believe this drop is not because the Valuation Roll is now more accurate but purely due to the recent changes to the appeal process, which has made it more difficult and given less time for businesses to appeal their business rates.

Under the new rules, any business wishing to challenge its issued value has had a shorter timescale than under the previous system (only five months) and in addition the process is more onerous, with businesses needing to provide more detailed grounds and all evidence to support the proposed alternative value.

Many ratepayers were not made aware of the restrictive deadline which passed on 31st August 2023 and the new system is so complicated that many proposals have been submitted incorrectly.

Businesses have had just five months to challenge their issued value (Picture: Jirapong - stock.adobe.com)

The problems with the system date back to the serving of the draft valuation notices in November 2022. The Assessor issued these to ratepayers with little explanation as to how the values had been arrived at. Many business owners were unaware of the implications of these notices and did not realise that there was a deadline to submit a proposal to appeal.

Then when a ratepayer wanted to submit a proposal, the Assessor’s electronic system was not available to use until the end of May, cutting seven weeks out of the timetable. We are still receiving requests to submit proposals from unrepresented ratepayers who did not realise the deadline had been brought forward. This illustrates the complete lack of communication around the whole process.

Reforms were needed to improve the appeals system, as highlighted in the 2017 Barclay Review “to modernise the approach, reduce appeal volume and ensure greater transparency and fairness”. However, we believe the changes that have been implemented by the Scottish Government have gone too far in the opposite direction – the reforms have certainly reduced the appeal volume, but they have consequently diminished transparency and fairness and are completely detrimental to the market as a whole.

We now have a less fair appeal system than in England and Wales. In England you can serve a check at any time to the very end of the list. There is an initial check stage, and only at the challenge stage do full details of grounds and evidence have to be provided. Whilst check, challenge and appeal is not perfect, it has now been tried and tested and would have been a more sensible model on which to base the Scottish system.

Louise Daly is Colliers Head of Business Rates in Scotland

Colliers is therefore campaigning for either the time limit for proposals to be increased significantly or the evidence requirements to be reduced or removed. Alongside this we call for the Assessors’ full rate build up and analysis to be published at the outset to make the valuation transparent.

We hope that the Scottish Government will take on board the concerns of ratepayers through continued engagement and that the necessary alterations will be made in advance of 2026 to create the fairer and more transparent system that Scottish businesses deserve.

Louise Daly is Colliers Head of Business Rates in Scotland