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Scottish Government Budget Update - Business Rates Key Take Aways

29th January 2021

The Scottish Cabinet Secretary for Finance, Kate Forbes announced during yesterday’s budget various business rates measures including:

  • An extension to the current 100% non-domestic rates relief available to properties in the retail, hospitality, leisure and aviation sectors for at least the first three months of the financial year 2021/22. 
  • A further commitment to extend this relief in line with any extension to the equivalent relief delivered during the UK Government budget, which is due on 3rd March 2021.
  • A reduction in the Basic Property Rate (poundage) to 49p (from 49.8p), the same as 2019-20 levels, with the Intermediate and Higher Property Rate supplements to be maintained as follows:

 

       Scotland UBR 2021/20

  1. 49p (for properties with an RV less than or equal to £51,000)
  2. 50.3p (for properties with an RV of £51,001 to £95,000)
  3. 51.6p (for properties with an RV greater than or equal to £95,001)

 

  • Fresh Start Relief thresholds increased from £65,000 to £95,000 offering 100% relief for up to twelve months to properties that have been empty for six months or more.
  • Business Growth Accelerator (BGA) relief will be expanded to property improvements where there has been a concurrent change of use to incentivise the re-use of existing assets. 
  • Unoccupied new builds will be able to claim BGA relief for up to three years. 
  • 100% Day Nursery Relief for all standalone nurseries in the public, private and charitable sectors will be extended to at least 30 June 2023.
  • The current 60% hydro relief and the 50% District Heating Relief will be maintained until 31 March 2032.
  • District Heating Relief will be expanded to offer 90% relief instead of 50% (for new district heating networks, introduced on or after 1 April 2021 that are powered by renewables). The 90% relief will be available to 31 March 2024.
  • A commitment to continuing with Small Business Bonus Scheme.
  • Maintaining transitional relief which caps annual rates bill increases at 12.5% for Aberdeen City and Aberdeenshire offices and all but the very largest hospitality properties across Scotland.
  • Discretionary sports club relief will be subject to a new statutory guidance from 2021-22, to ensure that it supports affordable community-based facilities.
  • A requirement that self-catering properties be let for 70 days or more in order to be classed as non-domestic from 2021-22.
  • Charitable rates relief will be removed from mainstream independent schools on 1 April 2021.

 

Lynsey Russell, Business Rates Associate at Ryden commented on this announcement:

“It’s great to see that business rates are very much on the Scottish Government’s agenda in this budget, continuing to fulfil the recommendations of the Barclay Review. 

"This announcement recognises the importance of rates relief to those hard pressed businesses operating in difficult sectors during these turbulent times. Nevertheless, we would have liked to see an extension of this relief into other sectors not currently in receipt of it, who still continue to suffer from the adverse effects of the pandemic.” 

Contact one of our business rates experts for more information:

Lorna Greig, North & North East Scotland

Lynsey Russell, Central Belt Scotland & England

 

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Lynsey Russell

Lynsey has over 16 years experience in the valuation of subjects for non-domestic rating within both the public and private sector.  She has valued a wide variety of subjects including retail, office, industrial, licensed and leisure, schools, colleges and universities and all other public buildings, negotiating appeals and giving evidence as an expert witness at various Valuation Appeal Committee hearings.

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