The Scottish government’s Non-Domestic Rates (Scotland) Bill, published on Tuesday (26 March), has called 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.
This is “only a first step” and needs to be followed by continued action across the whole of Britain, UKHospitality has said.
Chief executive Kate Nicholls commented, “Business rates reform in the UK is long overdue so it’s positive to see the Scottish government listen to concerns and act on the recommendations of the Barclay Review. More frequent revaluations will help provide a degree of flexibility and move away from a system where bills were too often out of date and not a true reflection of the business.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 is only a first step and 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.”
Meanwhile, Scottish Beer & Pub Association (SBPA) CEO Brigid Simmonds has welcomed the bill but recognises that there’s still room for greater support for licensees.
She said “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 over 21% higher than before the revaluation.
“The Government have 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.
“One of the key recommendations in the Barclay review was the “growth accelerator”, which guaranteed that investment wouldn’t be captured in rateable value for a 12-month period. It helps to remove the current disincentive to invest in pubs, which all too often are then hit by a rates hike. The SBPA have called for this measure to be introduced, but unfortunately this hasn’t been included in the Scottish Government’s Rates Bill.”