HOTELS across Inverness are planning to appeal against a rise in business rates that could see them facing the stark choice between cutting staff or passing price increases onto customers.
Across Scotland, rates are set to change for all business sectors from the start of April following the first revaluation since 2010.
Rates levels are based on the “rateable value” of individual premises – a combination of the annual rent council-employed assessors estimate they would command on the open market and a “poundage” rate set by the Scottish Gov-ernment.
What impact that revaluation will have is mixed.
Many small businesses look set to be better off as the rateable value at which rates kick in is set to rise from £10,000 to £15,000, with any below that level exempt from paying anything.
However, the hospitality industry looks set to be particularly hard hit as rates there soar, with some facing an 80 per cent increase.
Inverness surveyor Sandy Rennie, a partner in city firm J&E Shepherd, said it’s a worrying time, particularly for hotels.
“I think there is no doubt at all that increases of the size we’re talking about could make at least some businesses unsustainable,” he said.
“And even where that isn’t the case others will certainly struggle. The fact that there’s no phasing in of these increases will make it particularly difficult for many.”
Across the board Inverness hotels are facing huge increases in their rates bills with big players like the Mercure Inverness Hotel, Church Street, seeing its rateable value rise from £264,000 to £350,000, resulting in a potential bill of just over £172,000. Smaller players such as the Waterside Hotel, Ness Walk, will even see a huge climb in bills as the rateable value there climbs from £63,700 to £105,7000. Its rates bill for the coming year will be £51,600.
At the Kingsmills Hotel, Culcabock Road, general manager Craig Ewan said it was the last thing the sector needs at this time.
“We are looking at an 80 per cent increase in rates, up to over £400,000,” he said.
“At the same time when we’re also looking at increases being levied by suppliers – just now we’re looking at having to pay more for our wine, food and toiletries – it’s another cost that’s going to be difficult for us.
“We’ve had a very successful last few years and completely understand that rates will go up on that basis, but we have been very surprised by just how sharp the rise has been and we are appealing it.
“It puts us under pressure because we don’t want to compromise on the quality of our offering we provide and certainly don’t want to be hitting customers with huge price increases.
“Through the Inverness Hotels Assoc-iation members are being very much encouraged to appeal against their respective rises and hopefully common sense will prevail.”