New Deal for Business Non-Domestic Rates Sub-Group minutes: 6 June 2023

Attendees and apologies

• Colin Borland, Federation of Small Businesses Scotland
• Liz Cameron, Scottish Chambers of Commerce (Business Lead)
• Fiona Campbell, Association of Scotland’s Self-Caterers
• Martin Clarkson, Gerald Eve
• Jim Doig, Scottish Assessors Association
• Heather Honeyman, Scottish Assessors Association
• David Lonsdale, Scottish Retail Consortium
• David Melhuish, Scottish Property Federation
• Stephen Montgomery, Scottish Hospitality Group
• Robert Nicol, Scottish Assessors Association
• Alan Puckrin, Local Authority Directors of Finance
• Les Robertson, Institute of Revenues, Rating and Valuation
• Brian Rogan, CBRE
• Jonathan Sharma, Convention of Scottish Local Authorities (COSLA)
• Paul Togneri, Scottish Beer and Pub Association

Scottish Government

• Tom Arthur, Minister for Community Wealth and Public Finance (Chair)
• Ellen Leaver, Deputy Director, Local Government and Analytical Services Division
• Scottish Government Officials

Apologies

• Marc Crothall, Scottish Tourism Alliance
• Leon Thompson, UK Hospitality Scotland
• Pete Wildman, Scottish Assessors Association
• Colin Wilkinson, Scottish Licensed Trade Association

Items and actions

Welcome

The Minister welcomed members to the meeting and apologies were noted as above.

The Minister advised that he attended the second meeting of the New Deal for Business Group on 1 June 2023 to provide an update on the first sub-group meeting that took place on 30 May. He further noted that all sub-groups had been asked to provide a report by 28 June.

Minutes of last meeting

The minutes of the previous meeting held on 30 May 2023 were agreed and accepted as an accurate record.

Valuation methodology for hospitality

The Minister noted that the remit of the group is focussed on the operation and administration of the non-domestic rates (NDR) system and that valuation is not within this remit. However this matter was raised by several members at the first meeting of the sub-group on 30 May, and for that reason it is included on the agenda.

Heather Honeyman indicated that the Scottish Assessors Association representatives considered it appropriate for them to step away from this item of the agenda as there may be live litigation in relation to valuations and it would be inappropriate for them to discuss this matter in this forum. She noted that engagement had taken place with industry representatives on the practice note for licensed premises ahead of the revaluation, and the door remains open for further engagement. She further stated that the appeal mechanism is the appropriate place where discussion on valuation methodology should take place and that the best way to ensure valuations are right first time is for information requested from ratepayers to be provided to assessors.

The SAA position was noted, and it was agreed that it would be inappropriate to discuss in this group anything that could prejudice live cases. The Scottish Assessors Association representatives therefore remained for the item.

Martin Clarkson advised that engagement between assessors and the hospitality industry had been ongoing for almost two years although stated that in his opinion, draft practice notes were shared late in the revaluation process, after the publication of the draft roll, and that there was no real opportunity to feed back after publication. He stated that all effort is currently focused on proposals with only a 4-month window in which ratepayers may lodge proposals and also advised that bulk proposals could not be submitted until recently.

Stephen Montgomery noted that the Scottish Hospitality Group remains committed to meeting with assessors and other relevant bodies.

Action: The Scottish Assessors Association agreed to continue discussions with the sector including facilitating a meeting with hospitality and tourism representative bodies to discuss valuation matters.

Fiona Campbell noted the difference in the rateable values of self-catering properties in England and Scotland at the latest revaluation, and stated that consideration also needed to be given the tourism sector. She also noted her members’ concerns around the open consultation on second and empty homes which asks for views on the non-domestic rates thresholds for self-catering accommodation. She stated that any reforms should be meaningful, and not add burdens to the self-catering sector.

Les Robertson noted that any reduction in rates for a particular sector would mean an increase for another sector if public finances are to remain at the same level.

David Melhuish asked if the deadline for lodging proposals could be moved due to the “delay” in being able to submit them. Brian Rogan echoed this request. David further noted that confidential commercial information can be a challenge to provide and that improvements to how this information could be provided could be something the group looks at.

Heather Honeyman clarified that the new proposal system went live on 1 April 2023, and that ratepayers have been able to lodge proposals from that time. She explained that while the ability to bulk submit proposals went live recently, there was nothing to preclude lodging from 1 April and proposals have been received including by post.

Robert Nicol advised that ratepayers could make representations on draft values since they were published on 30 November 2022. He noted that the 4-month deadline for lodging a proposal was within the context of sharing draft values earlier than had happened in previous revaluation cycles.

Brian Rogan stated that in his view the Material Change of Circumstance (MCC) provisions in the Non-Domestic Rates (Scotland) Act 2020 are restrictive and were bad for business. He stated that the MCC provisions had been changed during the passage of the Bill without consultation with business and were not part of the Barclay recommendations. Liz Cameron asked whether the changes made to MCC could be reconsidered.

Anouk Berthier advised that much more information has been provided on valuation notices at this revaluation than had happened previously. She stated that shorter revaluation cycles had been supported by business during the Barclay Review and with shorter cycles, appeals need to be dealt within a shorter timeframe to ensure there is no accumulation over time, therefore the 4-month deadline was not arbitrary. She further noted that the government’s intention to introduce a 4-month deadline for lodging proposals had been known for a long time and that ratepayers had since 30 November to consider their draft values and prepare proposals if they wished.

The Minister reiterated his thanks for the commendable way assessors have delivered the recent revaluation with a one-year tone date and draft valuation notices being published for the first time. He noted that the process would be reflected upon ahead of the next revaluation in 2026. Whilst noting that he was open to considering all points raised by the group, he also noted that MCC appeals may not be the appropriate method of addressing economic shocks, and that three-year revaluation cycles were intended to make the system more responsive.  

Valuation: transparency and consistency

The Minister noted that matters relating to transparency and consistency had been touched upon in the discussion on the previous item, and invited the group’s further views on this topic.

Colin Borland stated that some FSB members only received their rates bills within the last week, and some are still outstanding. He advised that due to the change in the thresholds for the Small Business Bonus Scheme relief, then there may be a need to promote the Small Business Transitional Relief scheme as small business may not be aware of changes to NDR.

Les Robertson advised that councils are reliant on the timescales for billing system updates from their software suppliers and noted that some councils had to issue rates bills without the software updates for some reliefs being in place.

Alan Puckrin and Les Robertson both advised that their respective councils will contact all Small Business Bonus Scheme recipients entitled to Small Business Transitional Relief in the coming weeks to invite them to apply.

Liz Cameron noted the discussion on an ideas paper from the assessors at the last meeting, which could then be supplemented by the other members of the group. 

Action: Heather Honeyman and Liz Cameron agreed to meet outwith the sub-group to discuss the ideas paper further and report back to the sub-group.

Any other business

The Minister noted that the proposed future agendas for the group had been shared with the other papers for this meeting. He noted that next week will look at policies around the poundage, supplements, reliefs other NDR tax base more broadly although advised that this would not preclude other engagement on the budget later in the year. He also asked for members proposing changes, to explain the impact – for example the effect this would have on Scotland’s competitiveness, influence on investment, as well as any other impacts they wish to highlight. 

David Lonsdale noted that the Scottish Retail Consortium was open to further reform and asked if the Scottish Government had anything that could be shared to inform considerations. Scottish Government officials agreed to consider what information could be shared, however the Minister noted his wish to keep discussion as open as possible at this point.

In conclusion, it was noted that this was the start of a process and it will be important to be clear what can be looked at in the short, medium and longer term.  

Discussion took place regarding the timescales of the sub-group and whether there is scope to consider non-domestic rates beyond the end of June deadline.