BUSINESSES operating in the renewables space are calling on the Government
to give them transitional relief to deal with the new business rates regime
after some were hit with increases in their rateable values of as much as
650 per cent.
New rates will apply to businesses across Scotland as of April 1, with the
Scottish Government setting a rate of 46.6 pence in every pound for
businesses with a rateable value of between £15,000 and £51,000 and of 49.2
pence for businesses with a rateable value in excess of £51,000.
While many green energy businesses across the country have seen their
rateable value increase since the last valuation in 2010, industry body
Scottish Renewables said smaller renewable energy schemes have been
disproportionately hit.
The Buckny scheme in Perthshire, for example, has seen its rateable value
increase by 190 per cent, from £32,000 to £93,000. The Ederline scheme near
Loch Awe, meanwhile, has seen its go up by 313 per cent, from £98,000 to
£405,000, and the Cretshengan scheme at Tarbert has seen its increase by
650 per cent, from £4,900 to £36,750.
Hannah Smith, policy manager at Scottish Renewables, said it was
“unrealistic to expect a company of any size to absorb increases of this
scale overnight”.
“We acknowledge that business rates are a normal part of any company’s
expenditure, but the leap in costs is causing many of our members
significant concern,” she added.
Alex Linklater, director of the Buckny Hydro scheme, said the renewables
industry had been doubly hit by the new valuations coming in just a year
after 100 per cent rate relief was scrapped for commercial projects.
“We knew the rate relief would end sooner or later but we were expecting to
pay business rates at valuations which would be roughly ten per cent of
turnover,” he said. “Instead we’re seeing rates that are doubling,
trebling, quadrupling.
“Lots of businesses are complaining about rates going up but they’re
talking about increases of 30, 40, 50 per cent. We’re complaining about
300, 400, 500 per cent.
“For a lot of us that is financially unmanageable – most of us are financed
with bank loans. What we’re asking for is some sort of transitional relief.”
In addition, Alba Energy, a collective of small private hydro producers in
Scotland, is calling on the Government to review the way Scottish Assessors
come up with their valuations for renewables businesses. Unlike the
hospitality sector, whose valuations are based on turnover, or the office
sector, where valuations are based on rental values, there is no uniform
system for renewables businesses.
“All Alba is asking for is an equitable model of valuation, one that will
allow our industry to remain financially viable while paying its fair share
of rates,” Mr Linklater said.
A Scottish Government spokeswoman said that assessors are independent of
government, adding that anyone who thinks their valuation is incorrect “can
appeal their valuation via independent processes”. She added that the
Government “committed to expand renewables relief and have been engaging
the sector ahead of confirming detail shortly”.
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