Local government finance circular 5/2023: non-domestic rates relief guidance

Transitional reliefs

155. The key legislation is The Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2023, as amended.
156. Worked examples for Transitional Reliefs may be found in Annex E.

General Revaluation Transitional Relief

157. A General Revaluation Transitional Relief is available for all property types, capping gross bill increases at a specified percentage increase, dependent on the rateable value on 1 April 2023.
158. Any increase in the gross bill for a day in 2023-24 is to be no more than the following per cent (cash terms) of the gross bill for 31 March 2023:

Table 7: Percentage Caps for Revaluation Transitional Relief

159. In order to be eligible for this relief, the property had to be shown in an entry on the valuation roll on both 31 March 2023 and 1 April 2023. Properties with a nil rateable value on 1 April 2023, or which had a nil rateable value on 31 March 2023 are not eligible. Eligibility for the relief also ceases if there is a merger, split or reorganisation of the valuation roll entry for the property occurring after 1 April 2023.
160. If the property is shown in a split or reorganised entry taking effect on 1 April 2023, a reduction is applied to the gross bill and then uplifted by the relevant factor noted in the table above to calculate the transitional limit. The reduction to be applied is:

• 1.2 for properties with a rateable value up to and including £20,000
• 1.25 for properties with a rateable value from £20,001 up to and including £100,000
• 1.4 for properties with a rateable over £100,000

161. A property can continue to be eligible for this relief upon a change of ratepayer.
162. An application is not required for this relief and it may be awarded automatically.
163. This relief is mandatory and 100% funded by the Scottish Government.
164. It is unlikely that this relief would be considered a subsidy as it is a general measure.

Small Business Transitional Relief

165. This relief caps the maximum increase in the net rates liability relative to 31 March 2023 at £600 in 2023-24 after any relief is applied (including the General Revaluation Transitional Relief) and is available for properties:

• entitled to Small Business Bonus Scheme (SBBS) relief, and/or
• entitled to mandatory or discretionary Rural Relief on 31 March 2023 and no longer entitled on 1 April 2023 due to their rateable value increasing at the 2023 revaluation beyond the qualifying threshold(s) set out in the Non-Domestic Rating (Rural Areas and Rateable Value Limits) (Scotland) Order 2005, as amended.

166. To be eligible for this relief, the property requires to have been shown in an entry on the valuation roll on both 31 March 2023 and 1 April 2023. Properties with a nil rateable value on 1 April 2023 or which had a nil rateable value on 31 March 2023 are not eligible. Eligibility ceases if there is a merger, split or reorganisation of the valuation roll entry for the property occurring after 1 April 2023.
167. Any increases in rateable value after revaluation are not subject to the cap, and any decrease in rates caused by a decrease in rateable value after revaluation would also be taken into proportionate account.
168. An application is required for this relief.
169. This relief is mandatory and 100% funded by the Scottish Government.
170. It is unlikely that this relief would be considered a subsidy as it is a general measure.

Parks Transitional Relief

171. This provides 67% relief in 2023-24 for parks, or parts of parks, that existed but were not rateable on 31 March 2023, and which became rateable on 1 April 2023 following the coming into force of section 5 of the Non-Domestic Rates (Scotland) Act 2020, which amends section 19 of the Local Government (Financial Provisions) (Scotland) Act 1963.
172. An application is required for this relief.
173. This relief is mandatory and 100% funded by the Scottish Government.
174. This relief is likely to be considered a subsidy under the Act and is listed in the Non-Domestic Rates (Restriction of Relief) (Scotland) Regulations 2023. Public authorities should consider whether this relief is awarded as MFA, or whether it meets the other subsidy control requirements of the Act.