Business Rates Update: Scotland

Scotland

The Scottish Government has published the arrangements which will apply a cap of 12.5% on business rates increases arising from the 2017 revaluation. The detail is set out in a Scottish Statutory Instrument and BHA is working to clarify a number of points of detail. The most important issues so far are that:

  • the transitional arrangement will apply for one year only, with effect from 1 April;
  • the cap will apply to a wide range of hospitality businesses including:
    • hotels, hostels, guest houses and bed & breakfast accommodation,
    • caravan and camping sites,
    • pubs and nightclubs,
    • restaurants,
    • self-catering accommodation,
    • timeshare.
  • businesses have to apply for the relief to be made available to their business by writing to the relevant local authority (or authorities in cases if business premises are located in different areas);
  • businesses with lower rateable values (RV) remain eligible for rates relief under the Small Business Bonus Scheme (full relief for RV up to £15,000 and relief at 25% of rates payable where rateable values are between £15,000-£18,000). Although unlikely to apply to many BHA members it appears that any increase in rates payable by businesses with an RV between £15,000 and £18,000 will be restricted to 50%.

For larger businesses with significant rateable values the benefit of the cap will be covered by EU State Aid rules which restrict the amount of public sector support which can be made available to a single business to €200,000 (c£170,000) over a three-year period. The Large Business Supplement, set at an increased rate of 2.6p, will be levied on businesses with rateable values in excess of £51,000.

BHA will maintain a dialogue with the Scottish Government over what arrangements will apply in future financial years although it is unlikely that there will be any progress with this until after the Barclay Review of Business Rates reports in July.

The new rateable values remain in force despite the transitional cap. Businesses which have any concern about the new RV are advised to take professional advice and lodge an appeal if thought necessary

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