First business rates reforms will come into effect from tomorrow
THE first wave of reforms to Scotland’s business rates system comes into effect tomorrow, with the emphasis on stimulating the economy and cutting red tape.
The result of last year’s Barclay Review, the changes include 100 per cent relief for day nurseries to save the sector £6million a year and increase provision.
From tomorrow, unoccupied new properties will also escape rates altogether, and tenants who take them on will enjoy a rates holiday for the first year.
To help boost investment in properties, improvements that would previously have meant higher rates bills, will not incur additional charge for 12 months.
The reforms, the first of their kind in the UK, are among 30 recommendations made by the Barclay Review to modernise the £2.8 billion a year non-domestic rates system.
Visiting the Orchard Nursery in Edinburgh, Finance Secretary Derek Mackay said the changes would support business, while also raising adequate funds for council services.
He said: “When I appointed [former RBS chairman] Ken Barclay to review the rates system, I tasked him with updating it to better support business growth, encourage long-term investment and enable businesses to better navigate fast-changing marketplaces.
“The changes we put in place – in many ways going further than the Barclay recommendations – also allowed us to offer wider benefits, such as supporting the expansion in funded early learning and childcare entitlement with the relief for nurseries.”
The 100 per cent relief for nurseries is designed to mesh with the SNP policy to raise free childcare provision for three- and four-yearolds from 600 to 1140 hours per year by August 2020.
Andy Willox, Scottish policy convener of the Federation of Small Businesses, said the new measures were a step closer to developing “a fairer, smarter rates system”. He said: “Local nurseries are a prime example of smaller businesses fundamental to the success of their local community and economy.”
However, many large businesses remain angry that another Barclay Review recommendation – to halve the 2.6p large business supplement paid by 22,000 properties – was not adopted.
The Scottish Retail Consortium said firms across Scotland will have paid £189 million more in tax by 2019/20 than if they were in England.
The changes allowed us to offer wider benefits