Hospitality bodies "disappointed" by Barclay Review of business rates in Scotland

22 August 2017 by
Hospitality bodies "disappointed" by Barclay Review of business rates in Scotland

A review ordered by the Scottish government into business rates in the country has called for an overhaul but stopped short of recommending a new system, prompting disappointment from hospitality industry bodies.

The Barclay Review, overseen by former RBS chairman Ken Barclay, made 30 recommendations in total.

They included the proposal that the period between revaluations be cut from five years to three from 2022.

The review also suggested a one-year delay before rates liability is incurred when a property is improved, expanded or newly built. It said there should also be a reduction in the large business supplement, plus increased reductions in bills to help retain shops in town centres.

It also called for a legal duty on businesses to provide information for assessors.

Some Scottish businesses have seen their rates increase substantially in the most recent revaluation, with one reportedly receiving a 400% rise.

In response to the publication of the Barclay Review, commissioned in March last year, the British Hospitality Association (BHA) welcomed the review but said it was "disappointing" that it did not go further.

Willie Macleod, BHA executive director Scotland, said: "We welcome that the Barclay Review recognises the current Business Rates system does not work for the hospitality industry which saw unsustainably large increases at the 2017 revaluation of up to 400%. Our industry is typified by large bricks and mortar assets and low margins and are at an unfair disadvantage compared to other sectors of the economy and digital businesses with huge turnovers and small physical footprints.

But he added: "It is disappointing that the review was not able to recommend at this time a new system of rates that will work for the hospitality industry, but we hope the Scottish government will implement the recommendations which will work with us towards an entirely new and fairer system of business rates for our industry."

Meanwhile the Association of Licensed Multiple Retailers (ALMR), which represents managed pub and casual dining businesses, also called for further reform, despite welcoming steps to streamline the rates system for businesses.
ALMR chief executive Kate Nicholls said: "The Scottish government's review of business rate contains a few welcome proposals, but falls somewhat short of the wholesale reform that eating and drinking out businesses need.

"An increase in the frequency of revaluations is welcome, to keep the system as responsive and accurate as possible. And the relief for those businesses that have invested and expanded makes a great deal of sense and is something the ALMR has been pushing for. It is illogical and unfair that businesses that have invested time and a great deal of money in to expanding, employing, and renovating and reinvigorating businesses should then have to face a massive rates hike."

However, Glasgow-based management company Redefine|BDL Hotels (RBH), which 15 properties in Scotland, has called for the review recommendations to be adopted by the Scottish Government.

Stuart Houston, director of finance at RBH, said core issue surrounding the current business rates system is that the revaluing system is non-transparent and favours a one-size fits-all approach.

"The new recommendations would go some way towards redressing these concerns. Indeed, the call for short-term measures to make better information on rates available to ratepayers, and a medium term measure to ensure assessors provide more transparency and consistency of approach, would be beneficial to the hospitality sector and all ratepayers alike.

"Other measures which we would particularly welcome are the Business Growth Accelerator and the reduction of large business supplement.

"A 12-month delay in introducing rates to new properties and in newly expanded or improved properties would further incentivise our investment partners by allowing them to realise a return on capital spend before incurring additional costs.

However, Houston added that RBH is not overly happy about the suggested introduction of three yearly revaluations from 2022 and would like to see a more bespoke approach to be adopted by evaluators towards sectors like hospitality, "which are arguably at a disadvantage under the current system".

ALMR supports proposals for visa-free proposals for EU workers >>

ALMR: pubs and restaurants get "no access" to £300m business rates relief fund >>

BHA round-up: Not so cosy as it seems >>

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