Rates Bill should address all issues

Business rates legislation must go further, says trade

The Bill is making its way through Holyrood

TRADE bodies and surveyors have renewed calls for two aspects of the business rates system – the Small Business Bonus Scheme and the Large Business Supplement – to be overhauled.

The Scottish Government-commissioned Barclay group business rates review was published in 2017 and made 30 recommendations to tweak the system.

This led to new legislation – the Non-Domestic Rates (Scotland) Bill – to take many of those recommendations into law, including a move to three-yearly revaluation cycles and a 12-month delay on increased rates if and when an existing property is expanded or improved upon.

However, responding to calls for evidence on the Bill from the Scottish Parliament’s Local Government and Communities Committee, the Scottish Licensed Trade Association (SLTA), Scottish Tourism Alliance (STA) and surveyor firm Gerald Eve all called for a review of the Small Business Bonus Scheme (whereby operators with a rateable value of less than £18,000 are exempt), as well as a reduction in the Large Business Supplement (LBS) to restore parity with England; currently ratepayers liable to pay LBS in Scotland face a rate of 2.6p on the pound compared to 1.3p down south.

In its submission, the SLTA said it was “extremely disappointed” that both issues were not included in the Bill, adding: “These two issues have major consequences for Scotland’s licensed trade and should have been prioritised for inclusion in this Bill.”

Gerald Eve urged the government “to consider the full impact of [the] Small Business Bonus Scheme and the continued merit of this relief in its current form”.

Acknowledging that the relief in its current form has removed approximately 100,000 properties from the payment of business rates altogether, Gerald Eve said this “puts a burden on the other [operators] within the business rates system and places a larger emphasis on what the government considers to be a large business”.

“Consideration should be given to taper in the relief rather than exempt properties from payment of rates on a ‘cliff edge’ measure of a cumulative rateable value of less than £15,000,” the surveyor said.

And it called for the government to adopt one of Barclay’s recommendations and reduce the LBS to “reduce the burden” on operators.

The STA took a similar view in its submission, stating that the LBS should be brought into line with England as “the current disparity significantly harms Scotland’s reputation for being ‘the most competitive place to do business’.”

It also called for a review of the Small Business Bonus Scheme, stating that “all businesses should effectively be ‘paying their way’”, outlining its support for a system whereby all businesses “contribute in some form”.

However, it added that any such review should include “special dispensation or allowances afforded to those small businesses operating in the tourism sector, given the significance and dependency of the small tourism business contribution in helping grow and sustain a vibrant visitor economy in the rural communities”.

The Scottish Parliament committee will consider all submissions and debate the Bill, with a deadline for stage one of the Bill set for October 11.