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Scottish government moves to make business rates revaluations more frequent

26 March 2019 by
Scottish government moves to make business rates revaluations more frequent

The Scottish government could make business rate revaluations more frequent if a bill put before Holyrood is approved.

The Non-Domestic Rates (Scotland) Bill calls for business rates to be retested every three years as opposed to every five. The policy, which is yet to be voted on by MSPs, could be introduced as early as 2022-23.

The move was welcomed by industry bodies, who have long argued that the five-year gap between rates revaluations left businesses footing unnecessary and inaccurate bills. In the 2017-18 financial year almost 200,000 businesses were believed to have been hauled before magistrates' courts for non-payment.

The bill follows on from 2017's Barclay review, which recommended changes to the rates system including more regular reevaluation. At the time the review was criticised for not going far enough by suggesting a new system that was more forgiving to the sector.

UKHospitality chief executive Kate Nicholls said: "Business rates reform in the UK is long overdue, so it is positive to see the Scottish government listening to concerns and acting on the recommendations of the Barclay Review.

"More frequent revaluations will help provide a degree of flexibility and help move away from a system where bills were too often out of date and not a true reflection of the business.

"It is a positive first step, but it is only a first step and it needs to be followed swiftly by continued action, not just in Scotland but across the rest of Britain. High-street businesses have been devastated by increasing costs and hospitality businesses have been particularly badly hit.

"We were promised a full review of the business rates system in the 2017 Conservative manifesto. That review has yet to materialise. The system is not fit for purpose and a relic of 20th-century business, not reflective of the demands of modern business. Tinkering and piecemeal reform will only help so much."

Brigid Simmonds, chief executive of the Scottish Pub and Beer Association (SPBA), added: "The SBPA welcomes the publication of the bill and the implementation of some of the measures identified in the Barclay review in 2017. Moving to more regular revaluations, better administration and greater transparency are all steps in the right direction.

"There still remains, however, the need for greater support for Scotland's pubs, which face a disproportionate impact under the current business rates system. Through our analysis of the 2017 revaluation, it is clear that pubs and the wider hospitality sector remain disadvantaged in comparison to other high street businesses, facing an average bill in 2019-20 more than 21% higher than before the revaluation.

"The government has acknowledged the issue with the 12.5% real terms cap, guaranteed for the lifetime of this parliament, but this remains a temporary fix and a more permanent solution for the industry is desperately needed."

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