(Image: Gordon Terris)
When he established Cairngorm Lodges in Royal Deeside in 2013, it was held out as emblematic of the future of Scottish tourism.
Located deep in a 100-year-old Scots pine woodland, it was a template for the kind of off-grid, eco-tourism venture that the Scottish Government was so keen to support.
Now, following a sharp rise in the rateable value of the business, which since 2021 has also included the Cairngorm Bothies about a mile away, Mr Drummond fears the “sword of Damocles” is hanging over its very existence.
Mr Drummond used his technical expertise as a former subsea chartered engineer to design and build the lodges, which represent the “first-ever completely off-grid, purpose-built holiday development”. The accommodation is located around one mile into woodland and is not connected to the electricity, water or road network.
“A good question is why you would pay rates at all,” he told The Herald.
“What did Aberdeenshire Council do for me to merit a 620% increase?”
Read more:
- Expensive, confusing and unfair: Why Scotland's business rates need reform
- Reset the Rates: Six reforms to fix Scotland's broken business rates system
- 'Postcode lottery' leaves Scottish firms lost in business rates maze
- Who's backing The Herald's campaign to reform business rates?
The 620% increase Mr Drummond refers to was “the horror” of being informed that the rateable value of his combined businesses has surged to £62,250 from £22,000 at the last revaluation of non-domestic property. That would have meant his monthly business rates bill was set to increase from £360 to £2,583 before reliefs provided by the Scottish Government brought his monthly bill down to a “much more palatable” level. In fact, he said the temporary reduction in his rateable value to £36,750 has effectively allowed the business to keep going.
However, Mr Drummond emphasised that “those reliefs are temporary, and actually the damage is done by the new rateable valuations which have increased so significantly”.
While the reliefs, which were introduced during the process of approving the Scottish Government Budget for 2026-2027, will allow many in the self-catering industry to survive, Mr Drummond declared: “The sword of Damocles is hanging over us, in that there has been no change made to the rates valuations made by the assessors. So, when [the next revaluation in] 2029 comes around, or even next year when the Scottish Government is repowered, they could withdraw those reliefs and all of a sudden we are knackered again.
Gordon Drummond of Cairngorm Lodges (Image: GT)
“My point is that this is sitting over us. I use the expression like the sword of Damocles, ready to execute us just with the click of the fingers. That’s not good enough.”
Expanding on why his business had been subject to such a sharp rise in rateable value, Mr Drummond said the methodology used to calculate rates had changed since the previous revaluation took effect in 2023 “in that they no longer take into account the quality of the property”.
“There used to be a quality factor that said, ‘are you a very good chalet?’ for instance, or ‘are you a treehouse with no running water and electricity?’.
“That quality indicator has been taken away. Now it’s just a matter of your location.
Read more:
- Inside Scotland's business rates: Who pays and how are bills calculated?
- Reset The Rates: The six asks of The Herald's campaign explained
“Now, I’m in a rural village deep in Aberdeenshire, right on the boundary… of Cairngorm National Park, and I am being praised as a good location, as compared to some other people I know just outside Aviemore who are designated a fair location. So, Aberdeenshire, I think, has got a problem in that it has been designated… I’ve gone up two categories, from being a fair location to a very good location. That in part is the problem, so my rateable values have shot up massively.”
Mr Drummond was also critical of the appeals process, which gave ratepayers a short window between April 1, when the new valuations took effect, and July 31 to gather and submit information in support of their case. “They, the assessor, have until the next rates revaluation to look at your appeal, which is three years,” he said.
The Herald is this week campaigning for changes to the business rates system in Scotland (Image: Newsquest)
“As businesses, what we are mostly interested in is what this costs us a month. Because the implementation software was not in place to determine what we were paying when these reliefs were computed i.e. paying to the council, which is slightly immaterial of the rates valuation, we didn’t actually know by July 31, unless you were pretty slick with Excel, what you were going to be paying per month. That’s an unfair timeframe window to stick upon us.”