28 September 2016

  |  CBI Scotland


Update on Scottish Business Rates

Quick update for members on the latest activities on business rates in Scotland. 

Update on Scottish Business Rates

In addition to the joint letter calling for the reversal of the Large Business Supplement mentioned in the Message from the Director, we are also working with members and the independent Business Rates Review Group chaired by Ken Barclay – to many known as the Barclay Review.

We have circulated a draft briefing on rates to members and have held roundtable discussions with member companies and trade associations to inform our thinking ahead of the submission deadline to the Review on 7 October.

CBI Scotland was also part of a roundtable this month with the Review Group on business rates to get early views on where priorities are from a business organisations and sector trade associations.

Opening the meeting, Chair Ken Barclay summed up feedback so far to the Review Group as focusing on ‘fairness and equity’ and listed what he expected them to continue to look at in more detail:

  • Frequency of valuations
  • Tax avoidance
  • Complexity regarding exemptions
  • Better information on how rateable values are calculated

He set out the remit of the Review group as improving the business rates system to better support business growth and investment and emphasised that it was revenue-neutral and any recommendation they made would have to retain the current revenue take.

Ken Barclay’s review is interested in

  • Examples of investments pulled or delayed as a result of the rates situation
  • Examples of rates costs relative to other costs associated with a development
  • Views on self-certification in relation to more frequent revaluations (England looking at it for 2020)
  • Views on current system of exemptions and reliefs


Feedback to the Review Group from CBI Scotland

The main message we set out at the roundtable was that members have said the rates system needs to better reflect economic reality due to challenging economic conditions, a weak Scottish commercial property market and a business rates multiplier that is already significantly higher than other tax rates. This means we will be challenging the revenue-neutral condition of the review with costed recommendations.

We are setting out recommendations with a modest cost relative to the potential benefits from a more competitive commercial property system:

  1. Continue to align the Scottish business rates multiplier with other parts of the UK to avoid a deterioration in Scottish business competitiveness
  2. Index business rates by CPI from 2017/18 to avoid unsustainable increases in the business rates multiplier for property based businesses
  3. Exempt new investments in plant and machinery and environmental efficiency investments from business rates to encourage productive investment.
  4. Value Scottish business properties every three years to make Business Rates more responsive to economic conditions and reduce tax barriers to redevelopment.

In addition we recommend modernising billing and collection and a more comprehensive analysis of the economic rational of existing exemptions and reliefs, alongside local discretion for initiatives that can help redevelopment and address empty commercial property.


If you would like to discuss the review and our http://news.cbi.org.uk/news/guest-comment-from-chair-of-scottish-review-of-business-rates/ongoing activities in relation to it, please contact Mari.Tunby@cbi.org.uk