Business rates in Scotland: get the facts

The Scottish Government has set out the actions it is taking to ensure a competitive system of business rates in Scotland.

The Scottish Government’s plans will see business rates cut, overall, by £155 million in 2017-18, with seven out of ten premises better or no worse off – and in most cases, paying nothing at all.

Here’s what you need to know.

Small businesses will pay nothing.

Since the Small Business Bonus (SBSS) was introduced by the SNP government in 2008, small businesses have benefitted from reduced rates, or have been lifted out of rates altogether. To date small businesses have saved £1.2 billion.

The SBSS will be extended to ensure business premises valued at up to £15,000 will pay no rates – 100,000 businesses in all. That’s the best package of support available to small business anywhere in the UK.

And, business premises with a rateable value between £15,000 and £18,000 – around 3,500 businesses – will benefit from a 25 per cent discount on their bills.

For those businesses paying rates, the standard ‘poundage’ rate has been cut.

Business rates are calculated by multiplying the ‘poundage’ by the ‘rateable value’ of a property. The rateable value is determined by independent Assessors appointed by local councils. The standard poundage, which is fixed by the Scottish Government, has been cut – from 48.4 pence in the pound in 2016-17 to 46.6 pence in 2017-18. Only the very largest businesses will pay more. And, businesses that wish to appeal their business rates payments can do so free of charge.

Extra local government funding provided by the Scottish Government can be used to put in place local relief schemes.

Additional funds have been provided to Scotland’s local authorities by the Scottish Government, which can be used to address individual or highly localised impacts of the revaluation process. Finance Secretary Derek Mackay has provided the assurance that any council wishing to offer local relief will have the support of the Scottish Government in developing plans.

A package of support will be available to our renewables sector.

UK government cuts to subsidies put the development of renewable schemes in Scotland at risk. That’s why the Scottish Government will provide a package of reliefs to the sector. These include: 

  • Rates relief up to 100 per cent for qualifying community renewable and new build schemes, and a lower payment threshold for community schemes from 1 megawatt to 0.5 megawatt.

  • Bills capped at 12.5 per cent for small-scale hydro schemes producing up to 1 megawatt.

  • A new 50 per cent relief for stand-alone district heating schemes.

For hotels, pubs, restaurants and cafes, bills will be capped.

Without action the hotels sector would see a disproportionate increase in rateable value. To address this the Scottish Government will cap bill increases at 12. 5 per cent. To maintain fairness within the sector, this relief will be extended to pubs, cafes and restaurants too.  

This will benefit 8,500 properties across Scotland, and provides proportionately more support to the sector than is available in the rest of the UK.

For office space in Aberdeen and Aberdeenshire, bills will be capped.

Since 2015, the fall in oil price has impacted on businesses in the North East. In recognition of this the Scottish Government will cap bill increases for office space in Aberdeen and Aberdeenshire at 12.5 per cent. This will benefit around 1,000 properties.

The Scottish Government has provided support to Aberdeenshire, Aberdeen City, and other councils, to help them use their powers to offer further rates reliefs locally. Aberdeenshire Council have proposed a rates relief scheme of £3 million – despite Tory opposition. Aberdeen Council will debate proposals later this week too.

Read more about our action to support Scotland’s oil and gas sector here.


Follow us on LinkedIn here.