Rates hike for schools and leisure centres is put on hold

● But minister says majority of changes in business rates review to go ahead

The Scottish Government has put off a decision on increasing business rates paid by private schools and leisure centres.

Finance secretary Derek Mackay yesterday announced the government would go ahead with the majority of changes to the levy recommended by Ken Barclay’s review into the tax.

But he would not be drawn on Barclay’s controversial proposal to end the rates relief that independent schools enjoy as a result of their charitable status. And he has also deferred taking a decision on a similar recommendation to end the rates relief currently given to the arms length bodies, which run leisure facilities for councils.

Finance secretary Derek Mackay yesterday delayed taking a decision on whether to dramatically increase the business rates paid by private schools and leisure centres.

In a Holyrood statement, the finance secretary announced the Scottish Government would go ahead with the majority of changes to the levy recommended by Ken Barclay’s review into the tax.

Businesses will benefit from new rates relief measures to help them expand.

Under the so-called business growth accelerator scheme, firms will be exempt from rates increases for 12 months after they improve or expand their premises.

New build properties will also be free from rates until they are occupied for the first time. Other recommendations adopted included 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.

However Mr Mackay would not be drawn on Barclay’s controversial proposal to end the rates relief that independent schools enjoy as a result of their charitable status.

He also deferred taking a decision on a similar recommendation to end the rates relief currently given to the arms length bodies, which run leisure facilities for councils.

The review recommended that leisure centres, some golf clubs, private schools and universities should be brought fully under the business rates system rather than enjoy exemptions under their charitable status.

Mr Mackay said: “On each of those areas I will continue engagement to fully understand the impact of and any wider implications and possible unintended consequences in these areas before outlining my position in the implementation plan I propose to publish later this year.”

Murdo Fraser of Tories said ministers should rule out “this damaging SNP swim tax”.

First Minister Nicola Sturgeon previously announced 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 relief commencing from 1 April.

The government also vowed to take forward the expansion of 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 apply to all types of property, including industrial, he said.

Mr Mackay also confirmed a cap in rate rises for the hospitality sector and offices in Aberdeen and Aberdeenshire, first announced in February, would continue next year with an additional 12.5 per cent cap in real terms.

Mr Mackay told the chamber he expected the cost of the measuresthegovernmentwas taking forward to be in the region of £80 million.