New Deal for Business Group - Report on Progress & Recommendations: Implementation Plan

Annex C - Sub-Group 3 – Non-Domestic Rates (NDR)

Overview

The consultative sub-group on NDR was established under the NDBG to advise on further enhancements to the NDR system, following the implementation of the final recommendations of the independent Barclay Review of Non-Domestic Rates on 1 April 2023. The recommendations of the Barclay Review were aimed at delivering an NDR system which better supports business growth and long-term investment, which increases fairness and transparency, and which improves ratepayers' experience.

The Scottish Government sets NDR policy including tax rates and reliefs, and local authorities are responsible for the administration and collection of NDR and can also offer local relief. NDR income is notionally pooled at a Scottish level before being redistributed back to councils. As such, it is important that any proposals for significant change or reform to NDR be considered within the context of the partnership between Local Government and the Scottish Government, under the New Deal with Local Government. Scottish Assessors who are responsible for the valuation of non-domestic properties and are independent officials, albeit they work collectively through the Scottish Assessors Association, also have a vital role when considering any proposals for reform.

The remit of the group is to consider and report to the NDBG, and Scottish Ministers, on further enhancements to the operation and administration of the NDR system. To this end, it considers the current operation and administration of the NDR system, with the objective of ensuring the best environment to do business and deliver a growing economy whilst supporting our communities and recognising the importance of NDR income in funding the delivery of local public services.

Recommendations

The sub-group presented 10 recommendations – 4 short-term (6 months), 3 mediumterm (12 months) and 3 longer-term (18 months).

How we will report on progress

In the short to medium-term, success will be measured by budget decisions, progress against the sub-group’s recommendations, in particular, the short-life Task Teams which will report back to the sub-group. The Scottish Government will also conduct a survey to gather views on the impact of the extension of the proposal-lodging deadline and may consider the need for wider consultation and engagement on other recommendations.

Success in the longer term will be achieved if businesses view the NDR system to be less complex and to better support business growth, investment and competitiveness from 2024/25 onwards. This will be reviewed in the first instance by the NDR subgroup, recognising the key role NDR plays in helping fund the delivery of local public services. Success also means maintaining a stable source of income via NDR revenue that is considered fair by businesses and communities.