Hitting businesses with thousands of pounds in rates demands for vacant industrial and commercial properties could be a“killer” for the local economy.
Former Dundee and Angus Chamber of Commerce president Jim Pickett said his own business had received a bill for £8,000 for long-vacant office premises.
He said he was aware of another small firm facing a £14,000 demand because it could not find use for an old industrial space and others facing cash demands.
The bills have arisen out of changes then Finance Secretary John Swinney made in a Budget address last December and which were implemented on April 1.
Mr Pickett has been charged in relation to an office unit at the rear of the factory he owns at Wester Gourdie industrial estate.
The upstairs unit is not easily accessible and has lain vacant for several years.
Mr Pickett said his company could cope with the demand but he said others could find themselves in difficulties.
He said vacant premises could be bulldozed as owners looked to avoid charges and some firms could go to the wall as a result of the charges being imposed.
“Properties which have large bank mortgages put the owners in a really difficult situation as they have to find maybe £50,000 to £100,000 to pay the rates, if empty,” Mr Pickett said.
“The bank will not increase overdrafts to cover this and the only way out is liquidation/receivership.”
Mr Pickett – who warned rent hikes were likely as landlords moved to cover costs – said the changes were potentially serious for smaller city economies.
“I think this is a big problem and lots of Dundee companies will be experiencing them,” he said.
“This has been badly thought out. I could see the benefit in fast moving cities but here in Dundee and similar towns, this could be a killer for the economy.”
Garry Clark of the economic development intelligence unit at Scottish Chambers of Commerce said a lot of businesses were now facing enormous bills where none had been anticipated.
“This is an issue which has been raised with us by members,” Mr Clark said.
“The changes to the reliefs for industrial and commercial premises came into effect in April this year, as a result of changes made in the Scottish budget, announced on 16 December 2015.
“This is impacting particularly on industrial premises, which had previously enjoyed 100% exemption.”
The Federation of Small Businesses said only a relatively small number of its members were directly impacted.
However, a spokesman said it had encouraged the government to fully model the potential impact of the change before it was brought in and had urged that reliefs were given to properties being renovated for re-use.
A Scottish Government spokesperson said the initial policy was “moderated” after feedback.
“We have also committed to review the rates system in Scotland,” she said.
“Former RBS Scotland chair Ken Barclay is leading the Scottish Government’s review of the business rates system to ensure that it minimises barriers to investment, is responsive to economic conditions and supports long-term economic growth and investment.”