Scottish review of business rates has merits

Some recommendations compared with calls for reform in Wales

19 September 2017

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In mid-2016 Scottish Ministers set up the Barclay Review into the Business Rates system in Scotland. Chaired by Kenneth Barclay, former Chair of RBS Scotland and a member of the Advisory Board of IPPR Scotland, its remit was to make recommendations that ‘seek to enhance and reform the non-domestic rates system in Scotland to better support business growth and long term investment, and reflect changing marketplaces, whilst still retaining the same level of income to deliver local services upon which businesses rely’. A key requirement was for the recommendations to be revenue neutral, so an overall reduction in the rate burden fell outside the review’s remit.

Jane Shankland, Associate Director in Cooke & Arkwright’s rating department and Executive Committee Member IRRV South & West Wales Association, examines the report and compares some of the recommendations with calls for reform in Wales:

The Barclay Review was published on 22nd August 2017 and contains 30 individual recommendations on how the rate system could be reformed in Scotland. These include the creation of a Business Growth Accelerator through the introduction of a years delay before rate increases are incurred when a property is improved, expanded or newly built; implementation of three-yearly revaluations; a reduction in the large business supplement to make Scotland more competitive with Wales and England; a new relief for daycare nurseries; and support for town centres by expanding Fresh Start Relief. The paper recommended a separate review of plant and machinery valuations with particular focus on renewable energy sector valuations and statutory improvements to property including sprinkler systems. It also said that the effectiveness of the Small Business Bonus Scheme should be evaluated.

Jane said, “Some of the recommendations in this report bear merit. A move from five-yearly to three-yearly revaluations is something we have been calling for in Wales and England, so that RVs reflect market variations in a more timely and accurate manner. Delaying rate increases (Business Growth Accelerator) for new, refurbished or expanded properties would be welcomed by property developers in Wales. Empty rates on new developments can be a huge burden to them and can impact on the viability of a development project.”

Further recommendations included the modernisation of the billing and appeals process across Scotland to reduce appeal volume and ensure greater transparency and fairness.