Holyrood Committee backs Non-Domestic Rates Bill

The bill proposing major reform of business rates in Scotland has been supported in its general principles by Holyrood’s Local Government & Communities Committee.

In its stage 1 report on the bill, the committee says a clear majority of organisations from local government, to business and the third sector support the Non-Domestic Rates (Scotland) Bill, introduced following the Barclay review which made a series of recommendations seeking to enhance and reform business rates in Scotland.

Among the measures to secure the committee's support are the change of the timing of revaluations from every five to every three years, reform of the revaluation appeals system, a streamlined process of debt recovery by councils, closing a gap in the law by which those who own holiday homes can avoid paying local tax on the properties, and the introduction of the "business growth accelerator", which would reduce the rates bills of growing firms.

However the committee was split on the proposal that independent schools should no longer be able to claim charitable relief from business rates, with Conservative members Graham Simpson and Alexander Stewart dissenting. The majority believe the move would help "level the playing field" with state schools and generate important revenues for councils.

The committee as a whole also expresses concerns that the small business bonus scheme currently contains a "cliff edge" which stops small businesses expanding because they cannot afford the much higher rates, and offers a qualified welcome for proposals to make those conducting commercial activity in parks liable to pay business rates.

In addition it believes there is a need for practical steps to reverse town centre decline and bring back shoppers and businesses to high streets.

Convener James Dornan MSP commented: "This is the first bill for many years to make large scale changes to the rates system in Scotland, and there is no doubt that it will help provide a more modern and equitable rating system.

"We recognise the strength of feeling from the independent school sector about the bill’s proposal to remove charitable rates relief from them. However, we believe this will level the playing field with state schools and generate vital funds for local authorities at a time of increasing demand on their services. And it is important to note that this bill is not just about this single issue.

"We welcome much needed proposals to bring revaluations up to date with current market conditions and to reform an appeals system that has become almost an automatic part of the process for some ratepayers."

He added: "Despite our support for the general principles of the bill, it should not be considered a silver bullet. More must be done to tackle the issue of town centre decline, and work must be ongoing to ensure the rates system does not block organic business growth and encourages the wider societal benefits we all want to see."

Click here to view the committee's report.