Non-domestic rates reform: analysis of responses to consultation on Barclay implementation

7. Barclay Review Recommendation 13 – Greater information gathering power for Assessors

7.1 Questions Five, Six, Seven and Eight relate to Barclay Recommendation 13, "The current criminal penalty for non-provision of information to Assessors should become a civil penalty and Assessors should be able to collect information from a wider range of bodies". The Scottish Government committed in its Implementation Plan to change the current criminal penalty for non-provision of information to Assessors to determine rateable value, to a civil penalty by 2020. This change is intended to reduce the burden on the appeals system and incentivise the return of information to the Assessor. It was emphasised in the Barclay Review that this measure is not intended as a revenue-raising measure and any penalty was an incentive to ensure better provision of information to Assessors from the outset. The Barclay Implementation Consultation Paper states that any new penalty will have a designated body to administer it and there will still be provision for appeals.

Question 5 - What level(s) should this civil penalty be set at?

7.2 There were 64 responses to Question 5, the largest respondent categories were Representative Bodies and Local Authorities. There were no responses from the Independent Education Sector. A breakdown of respondents by type can be seen in the table below.

Table 5: Respondents Categorised

Respondent Category	Number of Responses
Businesses	7
Chartered Surveyors (Private Sector)	5
Independent Education Sector	0
Individuals	4
Local Authority / Local Authority Association / Local Community	22
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	20
Valuation Boards / Assessors / Related Representative Organisation	5
Total	64

7.3 Local Authorities and Assessors noted that the penalty needed to be higher than the cost of administering the penalty in order for it to be feasible to administer. Furthermore, they believed that the issues surrounding setting civil penalties were of concern for the Assessor rather than Councils and ratepayers.

7.4 Respondents were generally in favour of the change to a civil penalty. Assessors were in agreement with the change, however, their responses focused on the necessity for an effective system to administer this change, illustrated here by the Ayrshire Valuation Joint Board. It stated "an effective system must be developed to ensure the Assessor has access to all the information [required] which would contribute to reducing the demands placed on already limited resources. The net effect may minimise demands on the Assessor and the three constituent authorities charged with collecting the revenue from non-domestic rates."

7.5 A small number of responses were opposed to changing the nature of the penalty, the majority of these responses were from Businesses, also with support from the Scottish Borders Council. Opposition to the change was due to existing complexity to the non-domestic rates system, therefore these respondents believed that simplification of the current system would address problems of non-payment rather than the change to a civil penalty.

7.6 In addition, a small number of respondents, predominantly Businesses and Representative Bodies, noted that the current time period for providing requested information to Assessors (14 days) is too short. They stated it would be preferable to emulate the English system in which the time period to provide required information is 56 days.

Question 6 - How should the penalty be set? Should it be a fixed penalty or proportionate to/ banded by rateable value?

7.7 Overall there were 51 responses to this question, the largest respondent categories were Local Authorities and Representative Bodies. There were no responses from the Independent Education Sector. The breakdown by each of the seven classifications of respondent is detailed in the table below.

Table 6: Respondents Categorised

Respondent Category	Number of Responses
Businesses	4
Chartered Surveyors (Private Sector)	4
Independent Education Sector	0
Individuals	4
Local Authority / Local Authority Association / Local Community	21
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	15
Valuation Boards / Assessors / Related Representative Organisation	2
Total	51

7.8 With the exception of Chartered Surveyors and Businesses, the majority of respondents advocated for a scaled penalty based on the rateable value. COSLA called for "further consultation" on the detail of the penalty.

7.9 Chartered Surveyors were split between having a fixed or a scaled penalty. J&E Shepherd stated that they "do not agree that any correlation can be drawn between a property and the non-return of information. On that basis, any fine should be fixed at the same level for all and should be at a reasonable level. We would suggest £250 as a maximum." In contrast, WYM Rating stated "Any fine for non-return should be proportional to the level of rateable value but a cap put in place set at £500." Whilst there was no consensus from Chartered Surveyors in relation to a fixed or scaled penalty, they agreed that there should be a fixed maximum penalty in place.

7.10 Businesses were the only respondent category who generally preferred a fixed penalty to a scaled penalty.

7.11 From those who advocated for a fixed penalty there were varying suggestions of the size of the penalty; these ranged from GL Hearn Ltd.'s suggestion of "capped at £100 plus VAT" to "up to £10,000 or 20% or rates bill, per rates year" (West Dunbartonshire Council).

Question 7 - Do you have any views on who is responsible for administering the penalty and the process for appeals against the penalty notice?

7.12 There were 61 responses to this question, the largest respondent categories were Local Authorities and Representative Bodies. There were no responses from the Independent Educations Sector. A breakdown of the respondent categories can be found in the table below.

Table 7: Respondents Categorised

Respondent Category	Number of Responses
Business	6
Chartered Surveyors (Private Sector)	5
Independent Education Sector	0
Individuals	5
Local Authority / Local Authority Association / Local Community	22
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	18
Valuation Boards / Assessors / Related Representative Organisation	4
Total	61

7.13 The responses broadly indicated that Assessors should be responsible for administering the penalty. These responses came from a number of categories including Representative Bodies, Local Authorities, Chartered Surveyors and Individuals. An example of reasoning for this response came from West Dunbartonshire Council, "the Assessor would have the intelligence as to which ratepayers were in default" and therefore they should be the one to administer the penalty.

7.14 There were calls for the introduction of an Independent Body which could administer the penalty. Proponents of this included the Scottish Chamber of Commerce, North Ayrshire Council and the Scottish Business Ratepayers Group. No respondents provided detail on how this might work, other than it being emphasised that it would need to be separate to the Local Authority. Assessors and Individuals did not express views in support of or against the suggestion of an Independent Body being used to administer the penalty.

7.15 There was conflation between the use of 'Independent Body' to indicate the VACs and the reverse. Therefore, it is not possible to know whether all respondents who indicated 'Independent Body' are in favour of the VACs or whether those who responded 'VAC' would agree to any 'Independent Body' being in charge of appeals. Thus, although a significant number of responses are in favour of appeals being handled through a separate body, it is not possible to determine what that body should be.

7.16 A small number of responses, from Representative Bodies, Businesses, Chartered Surveyors and Local Authorities, indicated on the other hand that the Council should issue the penalty.

7.17 There was no consensus amongst Businesses as to who should administer the penalty, they were split between using an Independent Body or Local Authorities.

7.18 In respect of the penalty appeals process, there was general support that the VAC should be responsible for appeals. This was across all respondent categories except Businesses and Chartered Surveyors.

7.19 Assessors focused their response, as explained by the Grampian Valuation Joint Board, on "seeking a robust and effective system that ensure that Assessors have access to the information they require and minimises the demands on the resources of the valuation authorities." Although the focus of the Assessors responses was on functionality of the penalty, Dunbartonshire and Argyll & Bute Joint Valuation Board agreed that Assessors should be responsible for administering the penalty; the others did not comment.

Question 8 - Which organisations/ individuals should be required to supply necessary information to the Assessors, where applicable?

7.20 There were 59 responses to this question, the largest respondent categories were Local Authorities and Representative Bodies. There were no responses from the Independent Educations Sector. A breakdown by respondent categories can be found in the table below.

Table 8: Respondents Categorised

Respondent Category	Number of Responses
Businesses	7
Chartered Surveyor (Private Sector)	4
Independent Education Sector	0
Individuals	5
Local Authority / Local Authority Association / Local Community	21
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	16
Valuation Boards / Assessors / Related Representative Organisation	5
Total	59

7.21 It was widely thought that ratepayers should be responsible, at least in part, for supplying information to the Assessor. The perception was that ratepayers must be approached by the Assessor "in the first instance" to supply information (Rating Surveyors Association). Thereafter, the Assessors have the authority to approach other bodies for information. It was not mentioned how this would affect any potential penalty for non-compliance.

Other suggestions included:

• Current legislation, whereby the Proprietor, Tenant or Occupier are the only bodies to supply information, was sufficient.

• The 'Property Owner' should be responsible for supplying information.
• 'All bodies' should be required to provide information to the Assessors. Ayrshire Joint Board indicated that 'All bodies' meant "any person who holds, or has access to, any relevant information other than the proprietor, tenant or occupier. This will, for example, include contractors, architects, surveyors, solicitors, accountants, agent's advisors etc".