Our Thoughts

Good News for Scotland Ratepayers as Holyrood Backs Barclay Review of Business Rates

Scottish Finance Secretary, Derek Mackay, last week announced that the Scottish Government would look to implement the “vast majority” of the 30 recommendations made by the Barclay Review. The key recommendations are summarised in our earlier blog.

To help stimulate new development within Scotland, Mr Mackay has proposed to extend the ‘Business Growth Accelerator’ proposed by Barclay. The recommendation initially proposed that no rates should be payable on new build properties and that rates bills should not be increased for a period of 12 months following extension or improvement.

The revised proposal will ensure that any new build property is not added to the valuation roll until it has been occupied. This will remove uncertainty for developers and investors, and will ensure that new occupiers get the full benefit of the 12 months’ rate holiday.

While most of Mr Mackay’s proposals will be welcomed by ratepayers, it is extremely disappointing that he was not willing to commit to uniformity with England in terms of ‘The Large Property Supplement’ where Scottish businesses currently pay double the rate of their English counterparts. Barclay’s remit was to improve business growth and investment but the lack of parity with England will disappoint many businesses who are looking to invest in Scotland.

The proposed review of plant and machinery valuation will be welcomed by the industrial sector and will hopefully remedy the current situation whereby statutory requirements to improve your property can lead to an increase in rates liability.

We welcome the confirmation that three-yearly revaluations will come into effect in 2022 as this will help businesses avoid large swings in rates bills following a revaluation. However, this does not help those businesses who have seen significant increases at the 2017 revaluation and we would urge all ratepayers, who have not already done so, to seek professional advice with a view to submitting an appeal in advance of the impending appeal deadline of 30 September 2017.

The Finance Minister has committed to publishing an implementation plan by the end of 2017 and we will report further developments in due course.

Michael Harkin
Director, Business Rates
michael.harkin@bnpparibas.com
0131 260 1109
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