Changes to Business Rates & Valuations

A number of important announcements regarding changes to Business Rates and valuations of non-domestic property in Scotland in 2017 have now been confirmed by the Scottish Government. These announcements cover the changes to reliefs and surcharges for 2017 which will significantly impact businesses’ rates bills for 2017-2018.

Along with changes to business rates, the Scottish Government discussed the 2017 Rating Revaluation – the process of revaluing non-domestic property in Scotland. Business owners can find the results of these revaluations on the Scotland’s local Assessors website: www.saa.gov.uk.

We would recommend that all businesses use the website to find their new proposed rateable value (RV) as soon as possible, if they have not already done so. The website will contain details of the current valuation of the property, and the new proposed valuation, effective from April 2017, in order to allow a comparison to be made.

If you believe the new valuation is incorrect, details on how to appeal once the formal valuation notice is issued are contained on the website. The earlier a valuation is checked; the more time will be available to determine a course of action. Should you wish to discuss the new valuation and what that means for your business, you can contact your usual EQ team member.

The proposed changes to reliefs and surcharges from the Scottish Budget for 2017-2018 are detailed below. With regards to calculating the Business Rates bill, the RV is multiplied by the Poundage Rate and then any reliefs are applied.

For businesses with a RV of up to £51,000, the poundage rate that will apply for 2017-18 will be 46.6p in the pound – a reduction from the 48.4p which applied in 2016-17.  For example, this means that the business rates bill for a property with a RV of £40,000 (ignoring any applicable reliefs) would be:

£40,000 x £0.466 = £18,640

For businesses with a RV of over £51,000, a 2.6p surcharge – the Large Business Supplement – is added to the poundage rate.  For example, this means that the business rates bill for a property with a RV of £70,000 (ignoring any app
licable reliefs) would be:

£70,000 x £0.492 = £34,440

The Scottish Government has announced that, as was the case at the last revaluation in 2010, there will be no transitional relief for businesses whose rates bill increases substantially as a result of the rates revaluation, meaning that the new rates bill will be liable to be paid in full in the first year rather than phased in over a number of years.

For smaller properties, the Small Business Bonus Scheme has been extended in 2017-18, meaning that premises with a RV of up to £15,000 will receive a 100% relief from rates. Details of the proposed Small Business Bonus arrangements for 2017-18 are as follows:

* Eligibility subject to compatibility with State Aid rules.

** A ratepayer with multiple properties with a cumulative RV between £15,001 and £35,000 can be eligible for 25% relief for individual properties each with RV up to £18,000.

There are changes proposed to three reliefs in 2017-18:

• In common with forthcoming changes in England, it has been proposed that the mandatory part of rural relief increases from 50% to 100% (with no change to eligibility).

• It has been proposed to expand renewables relief (for certain schemes with community benefit and new-build schemes). Details are expected to be set out soon.

• The Scottish Government, in common with the UK Government, intends to propose a new relief for new broadband fibre infrastructure, subject to further consideration. Again, details are expected to be set out soon.

All other reliefs are proposed to roll forward unchanged into 2017-18.

Non-Domestic Rates: 2023 Revaluation