Rates threat still hanging over schools and golf clubs

THE threat of soaring fees for private schools, gyms and golf clubs grew yesterday after ministers refused to rule out an overhaul of the business rates system.

Derek Mackay confirmed he would implement the majority of recommendations made by the Barclay Review, meaning nurseries and hydro schemes will be exempt from non-domestic rates.

The Finance Secretary also revealed re-valuations will now take place every three years and new-build properties will not pay rates.

During a statement to MSPs he ruled out some of the proposed changes such as forcing farmers to be included within the rates system.

However, Mr Mackay failed to make a ruling on whether or not private schools, leisure centres and golf clubs would be forced to pay business rates – claiming the issue required further consideration.

The proposals are part of the Scottish Government-commissioned review led by former Royal Bank of Scotland chairman Ken Barclay.

It rejected a ‘significant overhaul’ of the entire system, which was called for by the hospitality sector after it was hit with eye-watering increases in bills this year.

Instead, it proposed a number of changes such as stripping independent schools of the right to use charitable status to claim relief on rates.

This could also see gyms and other publicly owned sports facilities forced to pay for the first time, along with golf courses and universities.

Mr Mackay insisted a decision on these changes required ‘further thought and engagement’.

Some top private schools have warned against forcing them to pay business rates, with Lisa Kerr, principal of Gordonstoun, previously warning this could ‘disadvantage’ schools in Scotland.

First Minister Nicola Sturgeon last week said that four recommendations from the review would be taken forward immediately as part of her Programme for Government.

These included a new relief for day nurseries which Mr Mackay confirmed would be a full 100 per cent commencing from April 1.

The Government also vowed to expand the Fresh Start relief scheme aimed at bringing empty properties back into use.

Mr Mackay said the relief would be increased from 50 per cent to 100 per cent for the first year of new occupation, and would be available after a property has been empty for six months rather than the current 12.

It will also now apply to all types of property.

He added: ‘My message to business after announcing this package is clear, come to Scotland, invest in Scotland and grow your business in Scotland.’

But Tory MSP Murdo Fraser said ending rates relief for sports clubs and council leisure centres ‘would undermine Scottish Government policy in encouraging active lifestyles and tackling obesity’.

Mr Fraser welcomed the proposal to exempt empty new build properties from rates and the indication of a reduction in the large business supplement.

But he added: ‘I would gently point out to the cabinet secretary that what he is doing here in both these cases is simply reverting damaging policy choices made by his predecessor Mr Swinney.’

Mr Mackay also announced a review of the small business bonus scheme, which exempts up to 100,000 properties with lower rental valuations, and a cut to 1.3p for the supplementary charge for large business premises – if the move should become affordable over the course of the parliament.

Scottish Labour’s economy spokesman Jackie Baillie said: ‘We have always said that the business rates system needs to be more transparent, predictable and streamlined.

‘We welcome confirmation of some of the recommendations being taken forward by the government.

‘However, the advisory group on administrative reform must get to work urgently.

‘We know from businesses that the current system is complex and burdensome and unequal across the country, illustrated in the implementation of the 12.5 per cent cap for the hospitality industry. The Cabinet Secretary should take practical action now.’