Business Rates

– Scottish Parliament written question – answered on 7th October 2010.

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Photo of Lewis Macdonald Lewis Macdonald Labour

Question S3W-36259

To ask the Scottish Executive what it estimates the cost would be of introducing transitional relief for businesses facing increased bills as a result of rates revaluation from 1 April 2010 that capped any increase in rates payable at (a) 12.5%, (b) 25% and (c) 37.5% per year.

Photo of John Swinney John Swinney Scottish National Party

The cost of transitional relief with a 12.5% cap was published by the Scottish Government on 14 May 2010 in the following report:

http://www.scotland.gov.uk/Resource/Doc/917/0098553.pdf.

The report showed the overall cost of a cap at this level, before appeals and reliefs are taken into account, would be around £194 million in 2010-11. To offset the cost would have meant increasing the bills for almost 99,000 properties by a total of £136million. The remaining shortfall of £58 million would have been funded by the Scottish Government. A relief scheme along these lines would have had the further result of shifting £77 million in business rates from largely public sector and large statutory undertakings onto small and medium enterprises and high street properties.

At the time the analysis was carried out for the May report, it was based on rateable values existing at 1 April (the date of the revaluation). The example of a 12.5% cap was illustrated because that is the level traditionally applied for transitional relief (it is, for example, the level that currently applies in England). In the period since then, the basis of the model has shifted as valuation appeals have begun to be settled. It will increasingly shift further as the appeal process gathers pace. Some of the resulting changes are already quite significant. As a result, it would now be misleading to model alternative rate caps using rateable values based on the information that existed at April 2010 which is out of date and therefore no longer valid.

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