18 Mar 2016

Scottish business rate system to be reviewed

Scottish business rate system to be reviewed


The former chairman of RBS has been appointed to review business rates in Scotland.

Ken Barclay will consider how business rates might better support business growth, respond to wider economic conditions and changing marketplaces and support long-term growth and investment.

Announcing the review today, First Minister Nicola Sturgeon said it, and Scottish Government's subsequent actions, will be guided by three clear principles.

“Firstly the intention of the review will be to make recommendations which, overall, are revenue neutral. This is not an exercise in increasing overall tax revenue, it is about ensuring taxation is fair," she said.

“Secondly the small business bonus scheme (which reduces the amount some firms pay) will be retained until at least 2021.

“And finally, the business rates system should make Scotland will be the best place to do business anywhere in the UK.”

Rates unpopular with SMEs

Business rates (also called non-domestic rates) are a tax on business property to help pay for local council services. They are based on the property and generally don't reflect the turnover or profits of your business.

Ms Sturgeon said she knows that some aspects of the business rate system are still a source of concern for some small businesses.

The Federation of Small Businesses’ manifesto, for example, argues that the current system can sometimes discourage investment, and that it should be simplified.

Ms Sturgeon added: “So there may well be a case for making changes – but that case needs to be considered carefully and the needs of all ratepayers must be balanced."

Ken Barclay said he was delighted to be reviewing the system.

He said: "This will be a detailed examination of the Scottish business rates system and I look forward to listening to the businesses who pay rates to hear their views.

"My aim is to identify a series of recommendations that seek to enhance and reform the system to better support business growth and reflect the economic importance of rates and changing marketplaces.”

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