Calum Innes, of property consultancy Galbraith, has been providing expert assistance to the Scottish Assessors Association as it works on the revaluation process more than 22 years after rates were originally abolished.
With valuation notices now being issued to more than 6,500 ratepayers, Galbraith is urging businesses to thoroughly check the notice, the information on which it is based, and to use the appeal window as required. Calum Innes said:
This has been a complex and frustrating experience for land-based businesses and farmers who will be most affected. I worked for the Scottish Assessors when rates were abandoned in the 1990s because the bureaucracy involved was regarded as outweighing any benefit, therefore I appreciate the labyrinthian processes that can be involved.
The new sporting rates will apply to any land holding which has sporting potential - regardless of whether shooting actually takes place. The Assessor has developed a formulaic approach to valuation with a tiered rate per hectare being applied to the predominant land types, reflecting their sporting potential.
As with any entry in the valuation roll there is a strict timetable governing the submission of a valid appeal. Appeals have to be lodged within six months of receipt of a notice advising of a new entry to the roll, but may take a great deal longer to finalise. There are potential reliefs and exemptions and it is in the interests of rural businesses to take advice before accepting their new sporting rates bill.
He added that there were a variety of factors on the ground that could significantly affect the valuation and consequently the final rates bill for a business, many of which may have been missed during the valuation process.
The valuation methodology provides scope for adjustment to reflect quantum. For example, whilst a deer forest may attract an initial rate of 2.00/Ha, a deer forest in excess of 8,000 hectares would be eligible for a discount of 50% to reflect quantum'.
There are circumstances where there may be different parties holding separate shooting rights over a single landholding. For example, one party might hold the deer stalking rights whilst another may retain the general shooting rights. In these circumstances, there would be separate entries made in the roll.
We have already seen evidence of estates being served with notices advising of apparently eye-watering valuations. Equally, we are aware of others who it appears will be eligible for rates relief.
Critically, the Small Business Bonus Scheme will apply. Currently 100% rates relief is available for those properties where the combined rateable value is less than 15,000. When applied to sporting rates this means that if you own 1,000 hectares (c.2,500 acres) of mixed ground, your rateable value will be in the order of 5,000. Alternatively, if you have 10,000 hectares (c.25,000 acres) of grouse moor, your rateable value would be in the order of 10,000. In either case, unless you have other rates liabilities, you should be eligible for 100% relief and would have nothing to pay.
This situation may be even more complicated when it comes to businesses that have diversified, but our key message would be that if you have any concerns you should seek professional advice to ensure that the valuation is reasonable and that any eligibility for relief is given consideration.