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Scottish budget business rates announcement

19th December 2017

The Scottish Government, in the draft budget announcement of last week, confirmed their intention is to act on the remaining Barclay Review recommendations, with the exception of removing charity relief for universities and Council ALEOs. The relief is, however, removed for independent schools (other than special schools) from 2020/21.

The government had previously announced their intention to implement the following new policies from the Barclay review:

  • A Business Growth Accelerator, which ensures that any rates bill rises due to improvements/expansion of existing properties will not take effect until 12 months after the changes to the property. The government further qualified this Barclay recommendation by further extending the proposed rates relief to ensure that no rates are paid on new build properties until they are occupied. The tenant should then qualify for the Growth Accelerator for 12 months.
  • A new relief for day nurseries to be brought in with effect from 1st April 2018 granting 100% rates relief which will be evaluated after a three year period to ensure that benefits have been felt, including by parents and carers.
  • An expansion of the Fresh Start Relief to include all property types; halving the period the property has to be empty to qualify (from 12 months to six months), and doubling the level of relief from 50% to 100% in the first year of occupation.
  • A move to three yearly revaluations from 2022, with rental valuations based on market conditions on a tone date one year prior.

In addition to the Barclay Review reforms noted above, the Scottish Government announced that:

  • In calculating the annual uplift in the Business Rates poundage, the Scottish Government will use the lower September 2017 CPI figure (3%), instead of RPI (3.9%).
  • The transitional cap for Aberdeen City and Shire offices will continue, save for the largest hospitality premises.

Moira Walker, Head of Business Rates at Ryden, comments “The government proposals to move business rates rises which were in line with the Retail Prices Index (RPI) previously, to the lower Consumer Prices Index (CPI), will lessen the impact of rates rises on hard pressed firms and keep Scotland on a much needed level playing field with England. This move combined with the rates relief that is on offer within the ‘Business Growth Accelerator' will hopefully have the effect of stimulating new developments within Scotland."

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Moira Walker

Moira Joined Ryden in June 2013, bringing a wealth of experience gained over 18 years in both the public and private sectors.

She has specialised in Business Rates having spent seven years in the public sector as a valuer within the Renfrewshire Assessors Office and as a Business Rates Specialist in the private sector where she has achieved substantial savings for clients. She is an Honours member of the Institute of Revenue, Rating and Valuation and is also a member of the Rating Surveyors Association.

In additon to Rating, Moira is a Registerd Valuer and has dealt with commercial property valuations for secure lending purposes and in regard to public sector asset valuations. She has also provided advice in respect of rent reviews and lease renewals over large commercial portfolios.

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