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Business Rates: SLTA Welcomes Scottish Government’s Pledge

Business Rates: SLTA welcomes Scottish Government’s pledge

The SLTA has welcomed plans set out in the Scottish Government’s Programme for Scotland to introduce a Non-Domestic Rates Bill to implement recommendations from the Barclay Review.

First Minister Nicola Sturgeon addressed the Scottish Parliament last week to announce the Scottish Government’s Programme for Scotland, setting out the legislative priorities for the Scottish Government in 2018/19.

She said that a Non-Domestic Rates Bill will be introduced to apply recommendations from the Barclay Review, including:

Moving to a three-year valuation cycle

Improving business rates administration to give better information to ratepayers and reduce the number of appeals

Reforming reliefs and tackling known avoidance measures

This follows the Scottish Government introducing Business Growth Accelerator Relief in April, delaying rates bills caused by property improvements such as installing CCTV cameras or air conditioning for 12 months.

The Scottish Government will also progress work on Barclay Review recommendations which can be implemented without the need for primary legislation – an advisory group will report later this year to inform further decisions on implementation.

Colin Wilkinson, managing director of the SLTA, said: “As part of the consortium of hospitality industry bodies, including the British Hospitality UK and the Scottish Tourism Alliance, the SLTA welcomed several of the recommendations in the Barclay Review Report when it was first released.

“This included the introduction of a Business Growth Accelerator to reduce unfair rates competition with hospitality businesses from universities and other public-sector services; and reducing valuation intervals to three years based on a tone date the previous year to name but a few of the recommendations we supported.

“Some reforms have been introduced already and we welcome the Government’s commitment to progress with the introduction of other recommendations contained in the Barclay Review.”

However, Wilkinson warned that “there still remains a fundamental flaw with the outmoded system of valuing hospitality and licensed trade businesses”.

He said: “The Barclay Review itself describes the valuation system for hospitality businesses as being ‘reliant on obtaining turnover information in the first instance. The turnover is then used to inform the valuation – with ratios used to convert turnover into imputed rental values’.

“But that’s not all as the system also makes use of inadequate and unrepresentative ‘rental evidence’; calculates ‘hypothetical achievable turnover’ to arrive at rental values regardless of whether actual turnover figures are available; and allows for interpretation on matters such as location, quality and management by individual assessors who may have little or no knowledge of the hospitality industry.”

Wilkinson added: “The Scottish Government’s 2017 revaluation report stated that ‘outside of the designated utilities, hotels saw the largest increase in rateable values in any sector in Scotland at the 2017 revaluation’.

“There is also further evidence to support the assertion that hospitality businesses pay a higher level of rates than other business sectors.

“The SLTA welcomes many of the recommendations made in the Barclay Review Report, but unless there is an equally applied commercial rating system for all types of businesses, Scotland’s hospitality industry is bearing an over-proportionate share of the commercial rates burden.”

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