Scottish Businesses ‘not listened to over latest Scottish Budget business rates’ says JLL

The Scottish Government has failed to create a fairer system for appealing incorrect business rates, according to Tom Fothergill of property firm JLL.

In response to the passing of the Non-Domestic Rates (Scotland) Bill, set out by Kate Forbes, Minister for Public Finance and Digital Economy, and the Draft Scottish Budget on Thursday 6 February, the commercial rating expert suggested the Scottish Government had imposed new protocols which could generate hefty fines for businesses, and have chosen to ignore methods to create a fairer appeals system.

Tom Fothergill, said: “From 1 April 2020 assessors will have new powers enabling them to request information from third parties in relation to a property; this goes beyond current powers which restrict requests to those with a legal interest such as the owner, tenant or occupier. If requests are not answered accurately and timeously, fines of up to 50 per cent of the rateable value of a property can be levied at the individual in receipt of the request. This is a huge concern for businesses, and will affect all ratepayers in Scotland. In a change to the system, assessors will soon be able to request information from a huge array of parties, and swiftly follow up with fines which could completely blindside those who haven’t had a chance to review, or receive information which the Assessors deems they should be aware of.”

The Non-Domestic Rates Bill includes moves to reform the “clogged” appeals system, but JLL says the Government has not gone far enough to create a fair system. In Scotland, ratepayers have only 6 months to appeal their rateable value, unlike in England.

Fothergill, explained: “We have suggested to the Scottish Government ways in which to make the appeal process fairer and less congested on a number of occasions. One method to resolve this would be to impose a duty on assessors to maintain fairness when making assessments. If a high street butcher appeals its rates successfully, the baker next door does not receive the same reduction in rates, despite being justified in seeking the reduction; nor does he have a fresh right of appeal.

“While the Scottish Government has no doubt made positive steps to reform the system in recent years, we wish to see it be pushed further to create an appeals system which works for businesses in Scotland rather one which restricts ratepayers and Assessors from achieving a fair outcome.”

A number of changes relating to the reform of Non-Domestic Rates in Scotland are to be enacted:

  • The bill will take forward some of the recommendations of the Barclay Review in 2017 – these include moving from five to three-yearly revaluations from 2022 which is welcome.
  • The Uniform Business Rate will remain in force across Scotland, after plans to give taxation powers to local authorities were scrapped earlier this week.

The Scottish Government also introduced a new tax multiplier for all properties assessed in the Rateable Value range of £51,000 to £95,000. Such properties will now benefit from an intermediate tax rate. This is a considerable boost for those ratepayers who will see a tax reduction in 2020/21; ensuring that 95% of Scottish properties attract a lower tax rate than in England. However, for properties with RV exceeding £95,000 the large business supplement is still well in excess of that which applies in England.

The annual budget was delayed from 12 December due to the general election. The statement kick starts a compressed timetable for agreeing the budget, with the final vote set to take place in early March.