THE owners of an award-winning local hotel say the amount they pay in business rates will more than triple under new valuations of commercial property.
Murdo and Beth McLeod, owners of the Knockderry Country House Hotel in Cove, say their annual rates bill will rocket from £9,500 to £30,000 in April.
The McLeods' warning adds to a growing chorus of concern across Scotland at the impact of increased business rates on the hospitality industry.
The Advertiser reported last week that 81 per cent of small businesses in Helensburgh and Lomond were in line to pay no rates at all - but Mrs McLeod said it was unrealistic of government to make the smallest businesses totally exempt from rates while expecting larger companies to pick up the tab.
She said: “We are family-owned. We have built up our business from scratch.
“We have a number of significant pressures upon us as a small business due to factors such as increases in the living wage, increases in VAT to 20 per cent, and the requirement to pay pensions to all our staff.
“It's not that we're against pension contributions or paying people the living wage, but when you add that increase to the others, businesses are going to have to break somewhere.
“This is a perfect storm for the industry and this is not, in any way, going to help."
Mr McLeod added: “We've been told our rates will go up from £9,500 a year to £30,000, with no real forewarning, no consultation and no attempt to get to the bottom of what our business is really worth.
“These calculations have been done on the basis of guidelines for hotels, restaurants and bars which were written by an assessor in Edinburgh handling the whole of the central belt assessment process.
“But hospitality businesses in Glasgow and Edinburgh have completely different cost structures to the likes of us.
“We need to pay more to attract people to come and work here, staff are more difficult to find, and we have to provide them with accommodation as well."
Knockderry was named Scotland's romantic hotel of the year in April 2016, and has scooped a long list of regional awards for the Argyll and Lomond area, including Country House Hotel of the Year and Fine Dining Restaurant of the Year this year, Small Country Hotel of the Year in 2015, and Restaurant of the Year in 2014.
The hotel also has four-star hotel accreditation from both VisitScotland and the AA and two AA rosettes for culinary excellence.
Mrs McLeod continued: “We have a very good, very professional staff that we want to retain. The last thing we need is short-term redundancies.
“We are looking at different ways of operating which may or may not see us change the whole style of our operation. We will have to make operational changes.”
Business owners who feel their new rates bills are unfair can appeal to the local valuation board – but Mr McLeod warned that the lengthy appeals process would add to the pressure on business owners.
He said: “The people who handle appeals are chronically under-staffed. There's going to be a tsunami of appeals from all sorts of businesses, and I think it'll take three or four years before all the appeals are decided.
"I worry that some businesses will not be able to survive that.”
The McLeods' concerns were echoed by Stuart Fraser, partner at the Oak Tree Inn in Balmaha, on the shores of Loch Lomond.
Mr Fraser said: "Our rates bill will more than double, from £69,500 a year to £140,000. Margins are so tight in the hospitality industry that we can't sustain that.
"We have invested so heavily to try and grow this business that to be penalised for our reinvestment is nothing short of disgusting.
"And if we decide we're done, who's going to want to come in and buy the place, knowing they're going to face these pressures?"
National news reports this week warned that rates increases across Scotland could force many pubs, restaurants and hotels to close.
Helensburgh councillor Aileen Morton, who is also Argyll and Bute's policy lead for sustainable economic development and tourism, said: “It’s a real shame there is no transitional relief scheme to help some other local businesses manage the large scale increases they are facing.
“The average increase for hotels across Argyll and Bute is around about 50 per cent, and there is at least one local hotel due to see their payments more than triple.
“The council asked the Scottish Government to consider giving transitional relief, and it would have been possible to design a scheme very tailored to support this key industry.
“Tourism is a major employer across Argyll and Bute, including in Helensburgh and Lomond, so I do have some concerns around the impact this could have.”
The Scottish Tourism Alliance has already asked for a meeting with the First Minister and finance secretary Derek Mackay to discuss the impact of the revaluation on the hospitality sector.
A Scottish Government spokesperson said: “Rating valuation of business properties is undertaken by independent assessors, funded by local councils, not the Scottish Government.
"Each council retains all the business rates revenue it collects, and it is for councils to apply rates reductions, on top of existing statutory reliefs, as they see fit. Individual business rate payers can appeal their valuation via independent processes if they feel it is incorrect.
“The Scottish Government announced a package of action to reduce business rates as part of the draft budget presented to Parliament by Finance Secretary, Derek Mackay.
"The Small Business Bonus Scheme – which has already saved businesses £1.2 billion – will be expanded from April to lift 100,000 properties out of rates completely.
"Meanwhile, 8,000 business properties will no longer pay the Large Business Supplement, and the overall business rates poundage – the core tax rate that applies to the rateable value of business properties – will also be cut by 3.7 per cent to 46.6p.”