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

8. Barclay Review Recommendation 16 – Civil penalty for non-provision of information to Councils by Ratepayers

8.1 Questions Nine, Ten, Eleven and Twelve relate to Barclay Recommendation 16, "A new civil penalty for non-provision of information to Councils by ratepayers should be created." The Barclay Review noted that preventing fraud is a key issue in non-domestic rates policy. Therefore, it is vital that Councils have up to date information of all non-domestic properties.

8.2 The Scottish Government committed to the creation of this penalty in its Implementation Plan. The Barclay Review emphasised that the penalty was not a revenue-raising measure but intended to deter fraud and keep information up to date. The BIAG indicated that the ratepayer has a duty to inform a Council within 28 days of moving in and moving out of a non-domestic property. Ratepayers have the same time period to provide any information requested by the Council. It has not been determined whether the penalty should be fixed or scaled.

Question 9 – What should this penalty be set at?

8.3 There were 57 responses to Question 9, with the largest respondent category being Local Authorities. However, only 44 of the 57 responses related to Question 9. The analysis presented here reflects only the relevant responses to Q9. No Assessors responded to this question stating it was outside their remit. There were no responses from the Independent Education Sector. A breakdown of the respondent categories can be found in the table below.

Table 9: Respondents Categorised

Respondent Category	Number of Responses
Businesses	3
Chartered Surveyor (Private Sector)	3
Independent Education Sector	0
Individuals	2
Local Authority / Local Authority Association / Local Community	24
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	11
Valuation Boards / Assessors / Related Representative Organisation	0
Total	44

8.4 Local Authorities and Representative Bodies highlighted that the penalty must be large enough to act as an incentive to supply information. It should also be set at an amount significant enough to offset any administration costs incurred by the body enforcing and collecting the penalty.

8.5 With regard to the penalty level that would be needed to ensure an incentive to supply information, East Dunbartonshire Council stated that it must be a "de-minimis figure" recommending upwards of £500. Furthermore, COSLA advocated for "the penalty to be set at the same level as that for non-provision of information to Assessors [regarding Council Tax]".

8.6 Chartered Surveyors agreed that there should be a maximum level for the penalty, with suggestions ranging from £250 (J&E Shepherd) to £500 (WYM Rating).

8.7 A small number of Individuals replied to this question, amongst whom views differed as to how the penalty should be set. One Individual simply disagreed with the notion of a penalty entirely. At the other extreme, one believed the penalty should be set at the full rateable value and paid within three months.

Question 10 - How should the penalty be set? Should it be a fixed penalty or proportionate to / banded by rateable value?

8.1 There were 56 responses to Question 10 including relevant responses from Question 9. No Independent Education Sector or Assessors responded to this question, the latter stating it was outside their remit. The largest respondent category was Local Authorities. A breakdown of responses by respondent categories can be found in the table below.

Respondent Category	Number of Responses
Businesses	4
Chartered Surveyor (Private Sector)	4
Independent Education Sector	0
Individuals	4
Local Authority / Local Authority Association / Local Community	27
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	16
Valuation Boards / Assessors / Related Representative Organisation	0
Total	56

Table 10: Respondents Categorised

8.2 The main view was that the penalty should be proportionate to / banded by rateable value. A number of responses mentioned that the penalty should be a set percentage of rateable value. Individuals were the only category that held consensus on this view, they were supported by Local Authorities and Representative Bodies.

8.3 Some responses favoured a fixed penalty, of these the largest respondent category was Local Authorities, with Representative Bodies and Businesses making up the remaining responses.

8.4 There was no consensus among Local Authorities, Representative Bodies or Chartered Surveyors on their preferred method of penalty. For example: WYM Rating advocated for a penalty "proportional to the level of rateable value", whereas GL Hearn and J&E Shepherd advocated for a fixed and capped penalty of either £100 or £500 respectively.

8.5 Other suggestions included:

• The penalty should increase with each failure to supply information. However, no specific figures were given on what the increase might be. This suggestion came from Local Authorities and Representative Bodies.
• A minimum penalty which, as stated by East Ayrshire Council, would act as a 'lower threshold' and would "recover costs of penalty issue/administration etc".

Question 11 - Do you have any views on who is responsible for administering the penalty and the process for appeals against any penalty notice?

8.7 There were 56 responses to Question 11, the largest respondent category was Local Authorities. No Assessors or the Independent Education Sector responded to Question 11 stating it was outside their remit. A breakdown of respondent categories can be found in the table below.

Table 11: Respondents Categorised

Respondent Category	Number of Responses
Businesses	4
Chartered Surveyor (Private Sector)	5
Independent Education Sector	0
Individuals	5
Local Authority / Local Authority Association / Local Community	25
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	16
Valuation Boards / Assessors / Related Representative Organisation	0
Total	56

8.8 Across the board responses indicated that the Council should administer the penalty.

8.9 Other suggestions included:

• the use of an Independent Body (in a form not specified), suggested by Businesses and Representative Bodies,
• using the Valuation Appeals Committee,
• the Assessors should administer the penalty.

8.10 Of the responses that made reference to the contest of the penalty notice, Councils / Local Billing Authorities were identified as those who should be responsible for appeals against penalty notices. The majority of these responses were from Local Authorities, with a small number from Representative Bodies, Individuals and Businesses.

8.11 Again, other suggestions for the responsibility for process of appeals emulated the suggestions in 8.9.

8.12 In respect of Chartered Surveyors, their responses were split between the use of an Independent Body and the Valuation Appeals Committee.

Question 12 - Should this be a mandatory penalty or one that the Council has discretion over (please indicate your preference and add any comments)?

8.13 There were 65 responses to this question. The Independent Education Sector did not respond to this question. A breakdown of responses by respondent categories can be found in the table below.

Table 12: Respondents Categorised

Respondent Category	Number of Responses
Businesses	5
Chartered Surveyor (Private Sector)	5
Independent Education Sector	0
Individuals	8
Local Authority / Local Authority Association / Local Community	27
Other Public Sector and Third Sector	1
Private Sector Professional / Representative / Trade Body	18
Valuation Boards / Assessors / Related Representative Organisation	1
Total	65

8.14 There was general support in favour of the penalty being discretionary, this was partly due to the view that "a mandatory penalty could be difficult to administer and may be disproportionate for some ratepayers" emphasised by COSLA. The majority of Representative Bodies believed in the penalty being discretionary.

8.15 A smaller number of Local Authorities, Businesses, Chartered Surveyors and Individuals were in favour of a mandatory penalty.

8.16 There were various suggestions, supported by a small number of respondents, which involved the penalty having both mandatory and discretionary elements. For example:

• WYM Rating indicated that the penalty should be mandatory however, Local Authorities should be able to withhold the application of the penalty.
• The Rating Surveyors Association held the view that the penalty should be mandatory however, discretion could be given during the appeals process.