14 Dec 2017

Scottish Budget: Firms welcome business rates measures

Scottish Budget: Firms welcome business rates measures

A number of new policies for Scottish business rates are to be introduced in 2018-19.

These were outlined today by Finance Secretary Derek Mackay as he set out the draft budget for next year.

These new policies which follow the Barclay Review include:

  • A business growth accelerator, which will ensure that any rates bill rises due to improvements to or the expansion of existing properties will not take effect until 12 months after those changes are made to the property.
  • A new relief for day nurseries to support the increased provision of increased childcare
  • An expansion of fresh start relief to include all property types, not limited to only listed property types as recommended by Barclay; halving the period the property has to be empty to qualify from 12 months to six; and doubling the level of relief from 50% to 100% for the first year of new occupation. 
  • A move to three-yearly revaluations from 2022 with valuations based on market conditions on a date one year prior. 

The Scottish Government has accepted the remaining Barclay Review recommendations, with the exception of the recommendation to curtail charity relief entitlement for universities. 

This acceptance includes the removal of charity relief eligibility for independent schools from 2020-21, excluding special schools. 


Mr Mackay has already confirmed that the Scottish Government will not implement the recommendation on the removal of charities relief for existing council arm’s length external organisations.

In addition to the Barclay reforms, the Scottish Government will:

  • Use the September 2017 rate for consumer price inflation (3%) rather than for retail price inflation (3.9%), to calculate the annual inflationary uplift in the business rates poundage for 2018-19.
  • Continue the transitional cap for Aberdeen City and Shire offices and all but the very largest hospitality properties. This means that 2018-19 bills will rise by no more than 12.5% in real terms (15.88% in cash terms) for eligible properties.
  • Introduce a new 60% relief for hydro generation properties.
  • Delay the entry of new-build properties onto the valuation roll, ensuring that no rates are paid until they are occupied. Thereafter the tenant will qualify for the growth accelerator for 12 months.


Today's announcements on business rates brought a positive response from the Federation of Small Businesses in Scotland.

Andy Willox, the organisation's Scottish policy convener, said: "We’re pleased to see Ministers seize upon the most sensible recommendations of the Barclay Review. 

"Moving to a different inflation measure will mean a smaller increase to many firms’ bills. Further, the introduction of a new business accelerator relief is a clever move that deserves plaudits. 

"By far the most valuable commitment in the budget for Scottish smaller firms is the retention of the small business bonus rate relief." 

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