Last week the Scottish Government presented its 2020-21 Draft Budget which made some welcome changes to the Commercial Rating System in Scotland.
Colin Wilkinson, MD of the Scottish Licensed Trade Association said: –
“These changes are welcomed, however, the Government needs to go further and review the disproportionate commercial rates burden faced by the licensed hospitality trade.
The proposal to introduce a lower Large Business Supplement Rate on properties with a rateable value between £51,000 and £95,000 will help the industry to some extent, but not solve the issues faced by an industry paying far more than its fair share of Government taxation. Renaming the Large Business Supplement to the Higher Property Rate and Intermediate Property Rate only masks the fact that many of our members still fall into the category paying a business rates supplement when, in our opinion, such businesses should not be deemed a “Large Business”.
This needs to change now and the SLTA will continue to push for further changes”.
Details of the draft budget:-
The draft budget 2020‑21 introduces the following policies that, taken together, will ensure that at least 95 per cent of all properties are liable for a lower rate than anywhere in the UK:
- Properties with a rateable value (RV) above £95,000 will continue to be charged the Higher Property Rate (formerly the poundage plus the Large Business Supplement) of 2.6p plus the poundage;
- Properties with an RV of between £51,000 and £95,000 will now only be charged an additional 1.3p on rates on top of the standard poundage. The introduction of this Intermediate Property Rate will improve the progressivity of the system and reduce rates liabilities for around 9,500 medium-sized properties by 1.3p, or 3 per cent;
- An extension of 100 per cent relief for Enterprise Areas to 31 March 2022;
- An amendment to the reset period for Empty Property Relief from 6 weeks to 6 months, as recommended by the Barclay Review;
- The introduction of a 70‑day requirement of actual letting for a self‑catering property in order to be considered non-domestic and liable for NDR rather than council tax, as recommended by the Barclay Review;
- The introduction of a new 100 per cent relief for Reverse Vending Machines from 1 April 2020, which will assist retailers in the context of the Deposit Return Scheme and supporting efforts to tackle climate change; and
- Introducing a district heating relief guaranteed until 2032 in order to provide certainty to investors.
The Scottish Budget 2020‑21 also maintains:
- The Small Business Bonus Scheme, which has lifted over 111,000 properties out of rates altogether as at 31 May 2019;
- The Business Growth Accelerator, which is unique in the UK and ensures that new build properties are not liable for rates until 12 months after first occupation and any rates bill rises due to improvements to or the expansion of existing properties will not take effect until 12 months after those changes are made to the property;
- Transitional Relief, which caps annual rates bill increases at 12.5 per cent in real terms for Aberdeen City and Aberdeenshire offices and all but the very largest hospitality properties across Scotland;
- Day Nursery Relief for all standalone nurseries in the public, private and charitable sectors;
- New Fibre Relief for all new fibre infrastructure for telecommunication;
- Relief for mobile masts in selected geographic locations; and
- Fresh Start Relief, which offers 100 per cent relief for all reoccupied properties that have been empty for six months.