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Dundee property chief hits out at ‘bonkers’ business rates regime

Firms are choosing to demolish properties rather than pay rates on empty premises.
Firms are choosing to demolish properties rather than pay rates on empty premises.

Rival nations are “laughing at us” because of “bonkers” business rate charges that drive entrepreneurial talent out of Scotland, says a Dundee property investor.

Bruce Linton, of James Keiller Estates, also said the tax regime is forcing him and others to demolish properties rather than stump up crippling charges for empty premises.

Meanwhile, the Scottish Conservatives are calling for companies hit by massive rates hikes this year to fight back, as the pressure mounts on the SNP to appease the business backlash.

The Courier exclusively reported the punitive impact of the business rates revaluation at the start of the year when it revealed the proposed £700,000 hike for Gleneagles Hotel.

Mr Linton said empty property charges mean it is no longer viable to hold unoccupied premises for potential clients, which is staving off investment.

He said those looking to set up a business will struggle to find an industrial property and will instead head to England, Ireland and the rest of the EU.

“They must be laughing at us because they will be picking up the best that is coming out of Scotland,” he said.

“It’s bonkers. Where in the world would you tax a business that is not making any income?”

Earlier this month, he flattened premises in Livingston formerly occupied by Vodafone rather than pay 90% rates on an empty property.

Empty industrial units received 100% business rates relief on unoccupied commercial properties until April last year.

Since then, landlords pay nothing on empty properties for only the first six months it is unoccupied. After that they have to pay up to 90% of the full rates.

Alan Mitchell, from Fife Chamber of Commerce, said it is “not surprising” that firms are looking at destroying premises rather than pay rates on empty properties.

“The business rates system has been acting as an inhibitor of business investment, growth and ambition when it should be there to encourage firms to take a gamble,” he said.

“Instead the system puts a series of obstacles in the way.”

From April, many businesses are facing huge increases in business rates because of a 2015 revaluation of the rental worth of premises.

One service station in Tayside is seeing its bills rocket by 220%, as reported in The Courier.

Murdo Fraser, the Perthshire-based MSP for the Tories, called on firms affected to appeal their revaluation.

“Businesses facing these extortionate increases could send a very clear message to the SNP on this,” he said.

A spokesman for the Scottish Government said empty property relief for industrial premises is more generous in Scotland than south of the border.

“No business rates are paid for the first six months an industrial property is unoccupied and 10% empty property relief is available on eligible properties after this time, compared to the situation in England where no relief is available after the initial six months.”