Holyrood’s Local Government and Communities Committee has given its backing to a Bill which proposes the first major reform of business rates in Scotland for decades.
The Committee says a clear majority of organisations from local government, to business and the third sector support the Bill, describing it as a move towards a ‘more modern and fair ratings system’.
The Non-Domestic Rates Bill was introduced following the Barclay review which made a series of recommendations seeking to enhance and reform non-domestic rates, or “business rates”, in Scotland.
A majority of the Committee also concludes that independent schools should no longer be able to claim charitable relief from business rates (Conservative members Graham Simpson MSP and Alexander Stewart MSP did not agree with this conclusion). The Committee say the move would help ‘level the playing field’ with state schools and generate important revenues for councils.
Committee Convener James Dornan MSP said:
“This is the first Bill for many years to make large scale changes to the rates system in Scotland and there is no doubt that it will help provide a more modern and equitable ratings system.
“We recognise the strength of feeling from the independent school sector about the Bill’s proposal to remove charitable rates relief from them. However, we believe this will level the playing field with state schools and generate vital funds for local authorities at a time of increasing demand on their services. And it is important to note that this Bill is not just about this single issue.
“We welcome much needed proposals to bring revaluations up to date with current market conditions and to reform an appeals system that has become almost an automatic part of the process for some ratepayers.
“We also welcome moves to close tax loopholes around holiday homes. But we want more to be done to crack down on “phoenix companies” who hide behind company law to avoid paying rates.
“Despite our support for the general principles of the Bill, it should not be considered a silver bullet. More must be done to tackle the issue of town centre decline, and work must be ongoing to ensure the rates system does not block organic business growth and encourages the wider societal benefits we all want to see.”
The Bill will now be debated in the Scottish Parliament.
The Non-Domestic Rates (Scotland) Bill was introduced in the Scottish Parliament on 25 March 2019 and follows the Barclay Review which made a series of recommendations seeking to enhance and reform non-domestic rates in Scotland.
Also known as business rates, non-domestic rates are levied on business properties with monies raised used to fund local services.
As it stands, independent schools with charitable status are entitled to 80% mandatory relief from non-domestic rates.
More information on this inquiry can be found on the committee's web pages