Further sting in business rates tail

Comment by Gillian McKenzie

FOR the operators facing astronomical increases in rateable values, the 12-month 12.5% cap on business rates rises looked to offer some respite.

Yes, it was only for a year; and yes, it meant non-domestic rates bills would still go up. But for those whose RVs were set to rocket by hundreds of per cent, 12.5% certainly seemed more palatable.

However, as April 1 came round and the new RVs – and cap on increases – kicked in, it emerged that the limit on rates rises was, in fact, in real terms, meaning a cap of 14.75%.

The Scottish Government said last week it had been “clear from the outset” that it was a real terms cap, but the only mention of it seems to have been in a separate ‘fact sheet’ which it said was published on February 21 – the day finance minister Derek Mackay announced the cap.

It has also emerged that licensees won’t automatically receive the transitional relief.
Instead, under EU state aid laws, operators are required to apply to their local authority to receive it.
And, as SLTN went to press, quite how to go about that was still not clear.

Regulations on the rates relief were issued on March 16, giving councils just over a fortnight to set up an application system. As this issue went to press, many were still in the process of doing so.
It goes without saying that any rates relief is not to be sniffed at,  but for many the rates cap is not what it first seemed. We can only hope the Barclay group’s forthcoming report sorts out the business rates system once and for all.