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Large rates rises for the public sector

5th July 2017

The public sector in Scotland has seen large rises in rateable values with universities increasing on average by 27.1%, hospitals by 11.6% and schools by 1.8%.

The rateable values have increased as the rating assessors believe there has been a significant increase in building costs to April 2015 from April 2008, the previous tone date for the rating revaluation.

Many public sector buildings are valued on a ‘contractors basis’, that is the cost of replacing the building taking into account age and obsolescence and other factors. In order to decapitalise the end value to an annual rental equivalent the government prescribes decapitalisation rates.

For this revaluation these ’decap’ rates have been set higher in Scotland than elsewhere in the UK at 4.6%. In the case of healthcare, educational or religious premises the rate is 2.9%.

This produces rateable values in Scotland that are 10% to 30% higher than the corresponding rateable values in England (with decap rates at 4.4% & 2.6%) and Wales (3.8% & 2.1%).

If you have not started the process of lodging a business rates appeal there is still time but applications must be made by 30 September 2017, three months from now. The only way to ensure your rates bill is as low as possible is to make an appeal. Otherwise your rateable value will stay in place for the next five years.

We strongly advise public sector estates teams to be aware of the rateable values for all their premises and to make appeals. Ryden has started the appeals process on behalf of Argyll & Bute Council, Wheatley Group and the Colleges Rating Framework amongst others.

For more information on how to make a business rates appeal contact Moira Walker, Head of Rating on 0141 270 3148 or at moira.walker@ryden.co.uk

Moira Walker

Moira Joined Ryden in June 2013, bringing a wealth of experience gained over 18 years in both the public and private sectors.

She has specialised in Business Rates having spent seven years in the public sector as a valuer within the Renfrewshire Assessors Office and as a Business Rates Specialist in the private sector where she has achieved substantial savings for clients. She is an Honours member of the Institute of Revenue, Rating and Valuation and is also a member of the Rating Surveyors Association.

In additon to Rating, Moira is a Registerd Valuer and has dealt with commercial property valuations for secure lending purposes and in regard to public sector asset valuations. She has also provided advice in respect of rent reviews and lease renewals over large commercial portfolios.

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