Chamber and committees

Decisions on Budget are made in the context of the prevailing economic conditions and government priorities. We have had to consider how best to target support within limited finances but also acknowledge that it is no longer possible to directly compare tax rates between Scotland, England and Wales due to differences in the tone dates used to derive Rateable Values. The move to three yearly revaluations and a one-year tone date was also a recommendation of the Barclay Review and was warmly welcomed by the business community and all parties in the Scottish Parliament.

The implication of that recommendation is that the tone date in England and Wales of 1 April 2022 will less accurately reflect up-to-date market and business conditions than the 1 April 2023 tone date adopted in Scotland. Different tone dates and by extension different impacts on Rateable Value growth, merit different decisions on tax rates and do not necessarily translate to higher liabilities.

By way of example, shops are expected to see an increase in total rateable value of 6% in Scotland and 10% in England. Hotels’ total rateable value is expected to rise by 28% in Scotland but 79% in England, while for pubs this is 15% in Scotland but 30% in England. For restaurants the overall increase is expected to be 8% in Scotland while the total rateable value increase of restaurants and cafes in England is expected to be 15%. The policies set out in the Scottish Budget reflect the impact of the revaluation in Scotland, not the revaluation in England.

Table 1 presents the estimated net cost of setting the Higher Property Rate at:

?43.0p for properties in the retail, hospitality, and leisure sectors with rateable values of £500,000 and lower,

?48.0p for other properties with rateable values of £500,000 and lower,

?50.8p for all properties with rateable values over £500,000,

compared to the Higher Property rate of 54.8p as proposed in the Budget.

These are estimates of the net revenue impact, after all reliefs including the Revaluation Transitional Relief are applied.

This is broken down by property class, as the Scottish Government does not hold property-level data on industry sectors. Property class is a classification used by Scottish Assessors to describe the type of property, and does not necessarily accurately reflect the use of a property.

Table 1: Cost of setting the Higher Property Rate to the same rates as England, by property class