This will be the 11th general revaluation to take place in Scotland since 1956 when the concept of general or quinquennial revaluations was first introduced. Following the abolition of domestic rates, the Community Charge or Poll Tax and the introduction of the current Council Tax, since 1990, valuation for rating purposes has been restricted to non-domestic properties. This includes retail garden centres but excludes plant-growing nurseries and growing areas which remain exempt from rating.
PURPOSE OF REVALUATION
In essence, the concept of 5 yearly or quinquennial reviews was introduced: -
- To update existing valuations from 2008.
- To reflect changes in relative levels of value between different classes of property.
- To increase the overall rating base on which rate poundages are levied.
The intended Revaluation of 2015 was postponed because, at a time of economic uncertainty, it was perceived by Government that the expected overall increase in rateable values was far less certain. Now 7 years after the Revaluation, to reflect market trends over that longer period, as interpreted by Regional Assessors from rental and other financial details sought from ratepayers, the rateable value of garden centres will be re-assessed.
BASIS OF VALUATION
It is the duty of an Assessor to assess the annual value of all non-domestic properties, one year with the next, having regard to the existing use of the property and its actual physical state, in order to fix the rent at which the property might be expected to let, on the basis that a tenant would be responsible for all normal outgoings, including repairs and insurance necessary to maintain the subjects in a state to command that rent. This is called Net Annual Value (NAV).
Effective date of valuation: 1st April 2015
Valuations to reflect physical circumstances as at: 1st January 2017
Valuations come into effect: 1st April 2017
Last date for appeal in year of revaluation: 30th September 2017 or 6 months from date of issue of the notice.
Issue of revaluation notices: Normally in the first quarter of 2017
It is proposed that from 1st April 2017 the rate poundage will be 46.6p and for properties over £51,000 RV, the rate will be 49.2p.
This will not be introduced in Scotland. Consequently, the new values will be applied in full from the start of the rating year.
An amended Small Business Rate Relief Scheme will be introduced. Subject to status, this will apply as follows.
For Rateable Values up to £15,000 100%
From £15,001 to £18,000 25%
£18,000 to £35,000 25% on cumulo values not exceeding £18,000
THE WAY FORWARD
Garden centres are recognised as a specialist class of retail property with specific characteristics which distinguish them from other forms of retail property. As a consequence, a similar basis of valuation is applied throughout Scotland, England and Wales.
There has been an overall understanding reached with the valuation service in England and Wales on the broad valuation principles to be applied but so far there has not been a similar opportunity to determine the likely consequences of valuation in Scotland. Early indications confirm there is a wide range of increase in proposed rateable values requiring careful scrutiny.
It is, therefore, important that specialist valuers acting for the garden centre industry are given early instructions to advise on proposed values and, where appropriate, take steps to lodge appeals to keep proposed assessments open for negotiation with Scottish Assessors.
It should be borne in mind that unless there is a material change in circumstances affecting the value, there is no right of future appeal and the value remains fixed for at least 5 years under current rules.
Allan M.McLaren MRICS IRRV ( Hons )
Retained Advisor to the HTA