George Osborne has committed to a wholesale review of the business rates system in England and capped the annual RPI increase in business rates at 2% instead of the proposed 2.3% increase. However, in Scotland, business rates are already a devolved tax so the Scottish Government now needs to make a decision whether or not to mirror this commitment to reform the system.
Brian Rogan, head of Rating and Taxation in Scotland for CBRE, said: “It was now or never for George Osborne to commit to a review of the rating system in England and Wales. The consensus from all sectors and lobbying bodies, most notably from the British Retail Consortium, was that reform was needed and could no longer be ignored.
“The Scottish rates system is now far more restrictive than its English counterpart in terms of appeal opportunities. This is due to recent Court of Session rulings on when companies can appeal their rates based on changes of economic circumstances.
“Scotland needs a business rates system that companies have confidence in, paying taxes proportionate to their current economic situation. The Scottish Government previously committed to a review of the business rates appeal system in Scotland to begin in 2014 and while a consultation document was promised this year, nothing has emerged. A delay in publishing this was expected whilst the Referendum was being decided, however industry calls for reform did not stop and the Scottish Government now has to follow George Osborne’s lead by capping the annual increase in rates and implementing industry calls for more regular revaluations.”