7500 firms to appeal rates amid trams and recession

Sarah Connelly says tram works keep customers from her William Street shop
Sarah Connelly says tram works keep customers from her William Street shop
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An “unprecedented” number of firms in Edinburgh have demanded reduced business rates as they struggle with a weak global economy and local difficulties such as tram works.

More than 7500 appeals have been lodged since April 2010 from companies that say there has been a “material change of circumstances” since their rates were set in 2008.

The main reasons for the appeals are said to be factors relating to the economic slump and reduced takings caused by events such as the Icelandic ash cloud in 2010.

However, 107 firms have used tram works alone as their reason for appealing.

As well as those claiming a material change of circumstances, a further 10,933 firms have appealed against their new “rateable value” – which is used to set a company’s annual business rates bill.

The Lothian Valuation Joint Board, which sets rates, may have to bring in extra staff to deal with the number of appeals.

Gordon Henderson, regional organiser for the Federation of Small Businesses in the east of Scotland, said: “I’m not surprised that they are struggling to keep up with this. Trams is one reason and the general economy is another, but business rates is the single issue that businesses contact me most about.

“Businesses in this economy are having to take a close look at all bank statements and if they are looking to make cutbacks – as everyone is – they question every standing order that goes out. Business rates is one of the biggest so they look at that very closely.”

Many more appeals are expected before the end of this financial year in response to tram works resuming along Princes Street, Shandwick Place and out to Edinburgh Airport.

Sarah Connelly, director of William Street-based lingerie shop Odyssey Boutique, has appealed her annual rates bill of nearly £5000 because of tram works nearby.

She said: “If people can’t get here they can’t shop and that has a huge impact on us. If we don’t get people in the door it affects the viability to keep trading; all we can do is buy less stock – but that affects the quality of offer – or get help from the council regarding costs and that’s where business rates come in.”

Her appeal was lodged in October 2010 and she is still waiting to hear the result, expected later this year. She said she was far from alone in appealing.

“Pretty much everybody I know that has premises that are rated has an appeal in,” she said. “That’s not just in the West End, it’s throughout the city.

“We’re next to the tram works because they’re one block along but it does not matter whether they are a mile down the road or right outside your door; they have a huge impact.”

Joan Hewton, assessor at the Lothian Valuation Joint Board, said the increase in appeals was “unprecedented”, and added: “The increased appeal numbers are creating a substantial increase in workload for my staff. Such increased pressure may require an increased legal budget or increased professional staff costs.”

Councillor Gordon Mackenzie, the city’s transport leader, said: “The increase in the number of appeals is largely down to the wider economic situation, with only 1.4 per cent relating to the tram project.

“However, the council has acknowledged the impact of tram works in the city centre, which is why we have committed close to £1 million this financial year and next to offering direct support to businesses affected, including assistance with the rates appeal process.”