Holyrood enacting ‘Barclay Review’ business rates recommendations
Move to three yearly revaluations from April 2022
In August 2017, BNPPRE reported former RBS chairman, Ken Barclay’s 30 recommendations for reforming the Scottish business rates system. In March this year, Derek Mackay MSP introduced a Bill that will put many of these recommendations onto the statute book.
The Bill introduces a three-year revaluation cycle from 2022. It also amends the period between the valuation date and when a rating list takes effect from two years to one year although this particular measure will apply to the 2025 rating list.
BNPPRE has long championed both these changes as they ensure rates liabilities are more akin to current trading and market conditions. South of the border the Bill to introduce three yearly revaluations “died a death” when the Westminster parliament was prorogued in October.
Changes in Scotland that have already taken place include the Business Growth Accelerator (New & Improved Properties Relief) that allow new and substantially altered premises to receive 100% empty rates relief for a maximum of one year and a further twelve months upon occupation. Similarly, Fresh Start Relief entitles businesses acquiring a long-term vacant property to relief from occupied rates for one year. Both these incentives are subject to EC State Aid rules that cap relief at €200,000 over a three-year period.
Planned changes that may not prove as popular from a business viewpoint include a reform to the appeal system. Under the current arrangements, a proposal is lodged with the Scottish Assessors Association (SAA) and if a negotiated settlement is not possible, the matter can be heard by the Local Valuation Appeal Committee.
The revised system will involve a two-stage process whereby once an initial proposal to alter the Valuation Roll is lodged with the Assessor, informal discussions can commence. If an agreement cannot be reached, then a formal appeal must be submitted that will require a £100 application fee.
Time limits for the appeal process are also being considered, although it is hoped that the SAA and Scottish Parliament will learn from the poorly implemented Check Challenge Appeal system in England, where such limits are delaying the revision of incorrect rateable values.
Other measures included in the Bill that may not be as welcome, are plans for the SAA to impose a new civil penalty for not complying with requests for rental information and the devolving of mandatory empty rate relief to local councils who could make it discretionary or abolish it all together.
Nevertheless, these ‘unpopular’ changes are minor issues that should not detract from the fundamental reform that will ultimately make the system more responsive to market conditions.