Scotland’s finance secretary Derek Mackay has announced plans to “go further than the proposals of the Barclay Review” on changes to the business rates system north of the border.
In a ministerial statement to Scottish Parliament, Mackay pledged to implement four key areas of Kenneth Barclay’s year-long review into business rates in Scotland:
- Three-yearly revaluation cycles
- Updating Plant & Machinery
- Fresh Start
The Barclay Review proposed that there should be a one-year relief from business rates for new build properties, which could be worth £45m to the economy, and Mackay pledged to go further by not applying business rates until a development has secured business tenants for new developments.
Commenting on the minister’s response, Louise Daly, associate director of rating at Colliers International in Scotland, said: “When the Barclay Review was published last month, we backed it strongly and said the Government must implement it swiftly, not simply focusing on revenue raising aspects or miss a golden opportunity to create a significantly fairer Business Rates system. Although ministers are understandably and rightly wary of implementing some measures designed to raise revenues lost elsewhere, the indication seems to be that all the core measures designed to make for a fairer business environment in Scotland will be adopted, and we wholeheartedly welcome that.
“The remit of the Barclay Review was that it had to be revenue neutral, but from a point of view of enhancing and reforming the business rates system to support economic growth and long term investment and reflect changing marketplaces. That should never have been of prime importance and we therefore urge the Scottish Parliament to back the measures being put forward by the Minister.”
Last chance to appeal current ratings
However, the latest revaluation, the first for seven years, came into force on 1 April this year and was calculated using market levels from April 2015. Unless rateable values are challenged by September 30 they will be fixed until 2022 with the Barclay changes not coming into effect until then.
The warning comes as the Scottish Government accepted a raft of proposals made by the Barclay Review of Non-Domestic Rates; including one to reduce the rating cycle from five to three years – but only from the next revaluation in 2022.
Niall Rankin, lead director for rating in Scotland at JLL, said: “The latest revaluation will lock businesses into a rating assessment which, without an appeal, will be difficult challenge for five years. With many new reliefs now available to ratepayers, we are encouraging companies to seek expert advice to make the most of these opportunities to make substantial savings in advance of the 30 September deadline.
“We broadly welcome the recommendations detailed within the Report of the Barclay Review and commend The Scottish Government on taking swift and decisive action in taking these proposals forward to promote business growth and investment in Scotland. The headline recommendation to adopt a three year rating cycle has been eagerly anticipated and has widespread support from the Scottish Assessors and ratepayers’ advisers.