Finance secretary pledges to extend cap on increases for another year
TRADE groups have welcomed finance secretary Derek Mackay’s pledge to extend the cap on business rates rises for a further year and explore alternative methods of valuation for licensed trade businesses.
Speaking in the Scottish Parliament yesterday (September 12) in response to the Barclay group’s business rates review, published late last month, Mackay went beyond the 30 recommendations outlined by the group and announced that the current 12.5% real terms cap on business rates rises will be extended to 2018/2019.
Mackay also encouraged the sector and assessors to continue to work together on alternative methodology for calculating non-domestic rates for businesses in the hospitality sector, whose rateable values (RVs) are currently based on turnover compared to square footage for businesses in other sectors.
The finance secretary also endorsed a number of Barclay’s recommendations, including that the appeal system should allow RVs to be corrected upwards as well as downwards; that the frequency of revaluations be increased from every five years to every three; and that the tone date be brought forward from two years prior to the revaluation date to one.
In a joint statement, the British Hospitality Association (BHA), Scottish Licensed Trade Association (SLTA) and Scottish Tourism Alliance (STA), which have campaigned heavily for a review of the business rates revaluation methodology applied to hospitality and licensed trade businesses, said they were “hugely encouraged” by Mackay’s recommendations.
“Our voice, the evidence we have presented to Scottish Government and the Barclay review group and our concerns for the tourism industry have been listened to and acknowledged and we welcome the recommendation of the extension to the current 12.5% business rates cap for hospitality and licensed trade businesses for the 2018/19 period,” said the groups in the statement.
“We welcome the finance minister’s recommendation that the methodology for calculating business rates continues to be reviewed with the aim of shaping a more equitable system for all businesses, irrespective of size or ownership.
“The proposed reduction in the revaluation term from five years to three years to sit more in line with market trends will offer reassurance to our industry during this period of political and economic unknowns as we head towards our Brexit date, as will the announcement of plans to bring forward the tone date to one year before the revaluation date from the current two-year period.
“Tourism has been acknowledged by Scottish Government as being ‘Scotland’s most important industry’; today’s announcement underlines and highlights the government’s support for our industry and acknowledges the importance of tourism as one of the main economic drivers in Scotland.”
