HUNDREDS of hotels, cafes and restaurants in the Capital are having to pay thousands of pounds over the odds in business rates because a software hold-up has delayed implementation of a promised reduction in bills.
Finance Secretary Derek Mackay announced in February that rates increases for the hospitality sector would be limited to 12.5 per cent after an outcry over a revaluation which saw some demands soar by 400 per cent.
But the cap did not happen automatically – businesses had to apply.
Edinburgh and other councils across Scotland, who are responsible for collecting business rates, had to order new software to be able to process the applications.
But the software has only just arrived and in the meantime businesses have been expected to pay the full increase as originally billed.
The Espy bar and restaurant on Portobello Esplanade saw its rates bill rise from £7350 a year to £40,344.
Owner Amanda Caygill said: “I’ve applied as you need to, but I’ve heard nothing so I’m still having to find £4000 a month instead of the £700 I paid before.
“We’ve had to put up prices, cut people’s hours, some of my staff have lost their jobs.”
Businesses will only be refunded once their applications for the cap have been processed.
Gordon Henderson of the Federation of Small Businesses in Scotland said: “Business rates are the second biggest bill firms face after employment costs. To go from £700 a month to £4000 seems just unsustainable.
“I think the rates cap was a surprise to councils so they would not be ready to go. You would think a modern, efficient rates system would apply changes automatically. That’s what we would like to see.”
Mr Henderson said it would have been sensible if the bills could have been suspended until the reductions resulting from the cap were sorted out.
And he pointed out: “Even after they get the cap, it’s only for one year so in March the massive increases will apply unless the Scottish Government comes up with some other initiative.”
The city council said it had a legal requirement to bill businesses for their rates, which it had done at the start of the financial year.
A spokeswoman said: “Since then we have informed businesses that where appropriate they should apply to be considered for appropriate relief.
“Like all other councils, we have been working with a national IT supplier to allow us to process the requests. We recently received the software required and the requests are being given high priority. We are now aiming to answer all requests by the end of the month.”
A Scottish government spokesman said: “The detail of this relief has been known since mid-March and is up to local authorities to administer.”