A HIKE in business property rates is threatening the long-term viability of Scotland’s livestock auction marts, according to the the Institute of Auctioneers and Appraisers in Scotland.

Expressing its outrage at the increases, will come into effect from April 1, 2010, the IAAS has pledged that its members will appeal en masse against the changes in the rateable value of mart premises.

Speaking after the Institute’s AGM in Stirling this week, where members expressed ‘extreme concern’ over the development, new president John Gregor, who is also general manager of Aberdeen and Northern Marts, said: “These horrendous rates increases will have an enormous effect on the operating costs of all of Scotland’s auction marts. With increases up to 70% or 80% or beyond, the impact will be heavily felt.”

The worst affected marts are the Thainstone Centre, which will face an actual rates increase of 70% to £102,900, the Stirling Agricultural Centre with an increase in excess of £33,000 (52%) and Newtown St Boswells, in the Borders, facing a rise of £44,066 (in excess of 140%).

To add insult to injusry, while Scotland’s marts will be facing an average rates increase of 52%, English marts will have to bear a maximum of 12.5%, because the Westminster government has re-introduced transitional relief for auction marts – while the Scottish Government decided against using transitional relief.

“Scotland’s auction marts are a vital link in the food chain and of huge importance to the store, breeding and prime stock markets,” said Mr Gregor.

“Recent livestock prices have improved but the whole livestock industry is battling to cope with a fall in livestock numbers which will make sustainability very difficult. These increases will seriously affect our profitability and competitiveness with English marts.

“The Scottish Government professes to be a strong supporter of the livestock industry in Scotland. However, by not re-introducing transitional relief, they are letting the industry down and threatening its very existence.

“The IAAS is currently looking into our members collectively pursuing this issue to the Valuation Appeal Committee or Lands Tribunal on appeal and we will be asking MSPs and MPs for their support during the appeal process,” he added.

The IAAS plans to challenge the logic behind the rates increases because they believe that the basis of the increases is flawed. Rateable values are based on analysis of rental values and the IAAS understands that the SAA, who calculate the rateable value, have little or no evidence to value Scotland’s marts and have as a result, based their proposed increased rateable values on inflated rental evidence from England.

Responding, a Scottish Government spokesman claimed that its approach to the revaluation would leave 60% of businesses in Scotland better off, with an average saving of £1320 per property - almost double the average saving south of the border.

“The Scottish Government is providing the most generous package of business rates reliefs available anywhere in the UK,” said the spokesman. “Many thousands of businesses will see a reduction through relief schemes worth £2.4 billion over five years.

“A quarter of all business properties in Scotland paid no rates at all last year thanks to our Small Business Bonus Scheme, and the expansion of this scheme means an additional 3600 business properties will benefit in 2010-11. We have also uplifted rural rate relief to support services in rural areas.

“The government thought long and hard about the merits of introducing a transitional relief scheme, and firmly decided that not doing so is the right course of action. To introduce transitional relief would involve taking money away from the majority of businesses that should legitimately see savings – savings which would instead be used to subsidise much of the public sector. It would increase bills for high street businesses and small and medium enterprises by almost £70 million. We simply cannot justify those outcomes in this fragile economic climate.”