A LONG-AWAITED review of Scotland’s broken rates system has ruled out a radical overhaul of the property-based tax.
Led by former RBS chairman Ken Barclay, the review has instead recommended a series of tax breaks to stimulate growth, cut red tape and improve fairness.
It also recommends a number of tax loopholes should be closed and "unfair" rates relief for private schools should be abolished.
Golf clubs, council leisure centres and universities should also be brought under a harmonised system, and revaluations carried out every three years to avoid sudden jumps in bills.
Mr Barclay said the "revenue neutral" review found “no strong appetite for a significant overhaul” of the current system, which raises around £2.8bn a year for local authorities.
The findings are likely to disappoint business who had called for a major shake-up of the tax.
Finance Secretary Derek Mackay was forced to introduce £45m of emergency reliefs for the hospitality sector and the north east earlier this year after a botched revaluation.
The first adjustment in non-domestic rates since 2020 left some businesses facing bills of up to 400 per cent and led to a widespread and vociferous backlash from firms.
The Barclay Review’s 30 recommendations include:
-Exempt properties for 13 months after improvements and extensions to stimulate investment
-Exempt new build properties for one year
-More frequent revaluations to “reduce shocks to the system”
-Reduce the large business supplement hated by big retailers
-Scrap rates for day nurseries, helping the roll-out of more free childcare
-Review the effectiveness of the small business bonus scheme
The review also says the private and public sector should be treated equally and businesses in different parts of the country should see similar changes to bills.
Councils are urged to collect debts more quickly.
Mr Barclay said: “We received input from hundreds of stakeholders across Scotland and further afield and are grateful for their invaluable insight.
“Although the feedback indicated a number of common themes and concerns, there was no strong appetite for a significant overhaul of the current property-based tax system.
“It is also important to recognise that – alongside the ‘headline measures’ to incentivise investment – administrative improvements can have a hugely positive effect.
“Finally, and crucially, any well-functioning tax needs to rely on principles of fairness.
Increasing fairness and transparency will increase credibility from ratepayers.
“Ratepayers providing the same goods or services should not be treated any differently because of their location, or by virtue of them operating in the public or private sector.
“We have also highlighted unfair advantages gained by anomalies within the system, and of those who deliberately avoid payment of tax. Neither is fair.
“These measures are essential for the rates system to remain credible for ratepayers and to ensure revenues are not undermined by avoidance tactics.
“We are clear, this is not about penalising certain sectors, it is about compliance, fairness and transparency.
“Our review group has used all the information and expertise available to us to produce this report, and are confident that the measures proposed can create tangible improvements.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel