Still confused about Business Rates relief?

07 July 2014

Still confused about Business Rates relief?

07 July 2014

Business rates continue to cause confusion across Scotland following the cancellation of the 2015 revaluation 18 months ago.  

The Scottish Government has not - as it claimed - enabled businesses to budget more accurately for coming years. Instead, our experience is a conveyor belt of enquiries from clients who were waiting for the revaluation to address their liability and now need expert help to navigate the confusing rates relief system.

Had the revaluation gone ahead, rateable values on commercial property – and therefore rates bills - would likely have been reduced because they would have been based on rental levels around April 2013. In many cases, this would have more accurately targeted those locations where greater assistance is needed.

Further, the reduction in empty property rates relief from 50% to 10% has not led, as assumed by the Scottish Government, to an increase in the occupation of vacant property – particularly retail.  Instead, it has led to landlords putting on hold new developments, or leaving current projects incomplete to avoid incurring this increased cost.

There has been a plethora of other relief schemes introduced by the Government over the last few years, many of which are unknown or not understood by the ratepayer.   These include:

Small Business Rates Relief: many of our clients had not been advised that they could qualify for this relief. This is available to a business based on the Rateable Value and whether its property is in the qualifying range.

Fresh Start Relief: is offered at 50% for a period of 12 months on the basis that the property previously was in receipt of Empty Property Relief for a continuous period of at least 12 months, the property has a Rateable Value of under £45,000, and when last used the property was either a shop or office.

New Start Relief: this is offered for new build properties completed in the three financial years from 1st April 2013. The relief is offered for a period of 18 months for up to a 100% although this does include the initial three month period which would have been available in any case, so is in fact only an extension of a further 15 months.

Such relief is awarded under State Aid De Minimis and limited to no more than €200,000 (around £159,000 at time of writing) over a rolling three year period for all properties under occupied by the business.

To further complicate matters, there can be no interaction of the various reliefs e.g. Charity Relief, Small Business Rates Relief or Rural Relief.

The bizarre scenario is that relief can be granted to companies who are in no financial difficulty whatsoever but can in effect receive significant State Aid solely if they meet the relevant criteria.

The complex nature of the various reliefs available and the fact that these are application based means that few ratepayers are aware of what they could actually obtain. Although this may be publicly accessible, the information is not attached to invoices issued by the various Councils.

If you’d like further information on the various reliefs available or ways in which to reduce your rates liability, please contact