The business rate for 2016 has been provisionally set at 48.4p, a 0.8% increase. This is in line with CPI and widely expected.
What was not expected was the doubling of the large business supplement from 1.3p to 2.6p. This applies to all properties with a rateable value of over £35,000 and all affected properties will see a 3.4% increase in their business rates liability, more than four times the rate of inflation.
Whilst we welcome retention of small business relief, this attack on ‘large business’ is unwelcome. Not only will it affect many businesses it will also have an adverse impact on our public services by inflation busting increases on the rates burden borne by bodies such as the NHS, who are already cash strapped.
Vacant Rates Relief
Vacant rates relief has also been severely reduced and for the first time, relief has been curtailed on industrial property, which previously benefitted from 100% vacant rates relief.
The new relief thresholds are:
- Industrial – 3 months at 100% relief then reduced to 10%. (Previously 100% relief permanently)
- Commercial Property – 3 months at 50% relief then reduced to 10%. (Previously 3 months at 100% relief then reducing to 10%).
The removal of industrial relief and reduction of commercial vacant relief leaves Scottish Ratepayers with potentially the most harsh regime in the UK and will have a severe impact on landlords and tenants with surplus property who are simply unable to find occupiers wishing to take on their properties.
These rules may lead to the expansion of many rates avoidance schemes and also a reduction in the availability of property as industrial landlords in particular may simply demolish premises rather than pay substantial vacant rates for un-lettable properties.
These proposals will come into force on 1st April 2016. Should you be affected then please contact us for further advice on how the changes may affect you and how you can mitigate their impact.
1st April 2015 – Valuation Date for 2017 Rating Revaluation
Summer 2015 – Summer 2016 – Assessors ingathering rental information and formulating schemes of valuation
Autumn 2016 – Issue of draft rateable values to Scottish Government
Autumn 2016 – publication of draft rateable values on SAA website??
February 2017 – confirmation of rateable values, business rate poundage and relevant relief schemes (including transitional relief)
1st April 2017 – 2017 – Rating Revaluation Comes into force
30th September 2017 – Deadline for lodging of appeals for 2017 Rating Revaluation (deadline may be subject to review)
We welcome the opportunity to mitigate your rates liability. For further information, or simply to discuss the above in greater detail please contact:
The Merchants’ Hall
22 Hanover Street
Edinburgh EH2 2EP