Elected Member Briefing - Non-Domestic Rates changes

The information contained on this page was accurate at the time of publication, but has now been superseded. It remains here only as a record of briefing information shared with elected members.

About this briefing note

Report by: Kevin Fraser, Team Leader (Local Taxes)

Date: 5 April 2023

Subject: Non-Domestic Rates changes happening in financial year 2023

Responsible Officer: Alan Taylor, Head of Corporate IT and Revenues

Purpose

To advise Elected Members of changes to the Non-Domestic Rates rating system in Scotland from 1 April 2023. 

Briefing Information

1 April 2023 brings significant changes to the Non-Domestic rating system in Scotland. 

In addition to all subjects being revalued by the Tayside Valuation Joint Board ("the Assessor") for the first time since 2017, there are significant changes to some relief schemes. 

These relief schemes introduce some new complexities and we are currently working with our software suppliers to enable these reliefs to be available to qualifying ratepayers as soon as possible. 

However, this may not be possible in time for the issue of annual rates bills that must be sent out before the end of April, to allow monthly instalments to commence in May. 

We will strive to have as many bills showing the full relief entitlement as possible but may not be able to include Transitional Relief or Small Business Bonus (other than the 100% level award).  

Each bill will come with an explanatory note giving more detail on this issue. 

It is our intention that a subsequent bill with all relief awarded will be issued in late May or early June. 

The reasons that we are taking this action rather than delaying the issue of bills is as follows: 

• Not all ratepayers will be affected; most will receive an accurate bill. 
• Avoids ratepayers having higher monthly instalments that would apply if we delayed billing. 
• We can accept repayment arrangements based on estimated charges if necessary. 
• We can, and will, delay any recovery action so that those who wish to wait for their amended bill can do so without fear of demands for payment being received. 

One of our aims is to make awards of Small Business Bonus, where there is an entitlement to 100% relief, in time for our initial annual billing run.  

To assess entitlement under the 2023 scheme a letter has been issued to all current Small Business Bonus recipients asking them to complete a short on-line form.  

Anyone receiving such a form should complete it as soon as possible in order that the correct award can be made. Anyone who does not complete the review will have their relief award terminated as of 31 March 2023, but may subsequently re-apply upon receipt of their rates bill. 

The following changes will take effect from 1 April 2023 

The rate poundage 

The rate poundage and supplements are set annually by the Scottish Government and apply across Scotland. 

For financial year 2023 the poundage is unchanged from 2022 at 49.8 pence per pound of rateable value. 

An intermediate supplement will mean that an additional 1.3 pence above the rate poundage (giving a total of 51.1p) will apply where the rateable value is between £51,001 and £100,000. 

A large business supplement will mean that an additional 2.6 pence above the rate poundage (giving a total of 52.4p) will apply where the rateable value exceeds £100,000. 

A search facility is available on the Scottish Assessors website to view the rateable value of any subjects liable for Non-Domestic Rates. 

Amendments to the eligibility criteria for relief under the Small Business Bonus Scheme 

There are to be new qualifying thresholds and a difference in the amount of relief available for ratepayers of single or multiple premises. 

In addition to existing exclusions for empty premises and premises used for payday lending, there will be further restrictions on car parks, parking spaces and advertising. 

Further details are available on our Small Business Bonus page. 

Transitional Relief awards to support those seeing a rise in charges due to revaluation 

A revaluation of all Non-Domestic rates subjects will take effect from 1 April 2023; the first such revaluation since 2017. 

Rates relief schemes have been introduced to support those that will see a significant rise in the amount payable because of this. 

There will be a general scheme based on increases in rateable value, a scheme for those losing certain relief awards and a scheme for premises being charged rates for the first time. 

Further details are available on our Transitional Relief for financial years 2023 to 2026 page. 

For more general information on all valuation matters, please visit the Scottish Assessors Association website. 

Rates payable on empty premises 

As of 1 April 2023 each Local Authority in Scotland has full autonomy in choosing to set a reduced charge for premises that are empty of all movable fixtures and fittings or applying the standard occupied rate. 

For financial year 2023, Perth & Kinross Council have chosen to replicate the statutory reductions that were in place up to 31 March 2023. 

This means that no ratepayer will be adversely affected through these new powers. 

View our empty properties page for further information. 

Extension to Day Nursery Relief 

Rates relief scheduled to end as of 30 June 2023 has now been extended indefinitely. 

Enhancement to Fresh Start Relief 

The upper rateable value threshold to be eligible for Fresh Start relief has been increased from £95,000 to £100,000. 

In addition to this, anyone receiving Fresh Start relief on 31 March 2023 will continue to receive relief for the remaining duration of the eligibility period regardless of whether the new rateable value is above the threshold. 

New and Improved Property Relief (the Business Growth Accelerator) 

Any ratepayer in receipt of New and Improved Property relief on 31 March 2023 will continue to be eligible for an equivalent percentage of relief on the new rateable value for the remainder of their eligibility period.