New Deal for Business Non-Domestic Rates sub-group minutes: September 2024

Attendees and apologies

Ivan McKee, Minister for Public Finance (chair)

Brian Rout, Scottish Assessors Association

David Lonsdale, Scottish Retail Consortium

David Melhuish, Scottish Property Federation

Fiona Campbell, Association of Scotland’s Self Caterers

Gavin Stevenson, Night Time Industries Association

Graham Howarth, Gerald Eve

Heather Honeyman, Scottish Assessors Association

Jonathan Sharma, COSLA

Leon Thompson, UKHospitality Scotland

Les Robertson, Institute of Revenues, Rating and Valuation  

Marc Crothall, Scottish Tourism Association

Paul Togneri, Scottish Beer and Pub Association

Pete Cheema, Scottish Grocers’ Federation

Stacey Dingwall, Federation of Small Businesses Scotland

Stephen Montgomery, Scottish Hospitality Group

William McFarlane, Scottish Assessors

Scottish Government Officials

Apologies

Alan Puckrin, Inverclyde Council

Colin Wilkinson, Scottish Licensed Trade Association

Robert Nicol, Scottish Assessors Association

 

Items and actions

Welcome and Minutes of Last Meeting

The Minister welcomed members to the meeting and noted the apologies received. Stephen Montgomery noted Liz Cameron would be late to the meeting. The minutes of the last meeting were agreed.

Chair’s Update

The Minister referred to the recent Fiscal Statement by the Cabinet Secretary for Finance and Local Government, noting the challenging public finances situation, and described a number of ‘known unknowns’ until the Chancellor’s Budget on 30 October. He noted that the Scottish Government (SG) would consider any outcome of the Labour’s manifesto commitment on reforming Business rates with interest. The Minister also referred to the recent Programme for Government which confirmed SG priorities. He stated the Scottish Budget would be on 4 December, subject to confirmation, with the Tax Strategy published alongside. He suggested that the next Non-Domestic Rates (NDR) sub-group meeting would offer the opportunity for members to share their Budget 2025-26 asks on NDR.

David Lonsdale asked whether SG had any intelligence on the UK Government’s Budget. The Minister said he did not but noted a forthcoming Scottish Parliament debate on the UK Budget.

Graham Howarth stated that the poundage is based on September Consumer Price Inflation (CPI) which is published in October and any intelligence on rates was unlikely before then.

The Minister referred to the sub-group’s recent work including a revaluation timeline, and a RAG report on recommendations which demonstrated progress made. He stated he had recently met with Alcohol Focus Scotland and Sainsbury’s on a Public Health Supplement (PHS) and noted his openness to discuss this further should members be interested.

Stephen Montgomery stated that it was time to take stock on the sub-group’s progress including on potential fees on appeal. Stacey Dingwall agreed.

David Lonsdale shared a link to the Scottish Retail Consortium’s Budget 2025-26 recommendations and noted PHS had been raised with him at the Scottish Parliament’s Finance Committee last week.

Mike Grieve left the meeting.

Tax Advisory Group: Update

SG officials provided a readout from the Tax Advisory Group meeting on 11 September where discussion had focused on the forthcoming Tax Strategy. David Melhuish queried the timing of the Tax Strategy, stating that the Finance Committee had indicated that it expected to see the Tax Strategy before the Budget.

David Lonsdale asked whether SG would call for other taxes to be devolved to Scotland. The Minister stated that while SG supported this in principle, aside from taxes such as the aggregates levy which is to be devolved, there was nothing currently planned and significant legislative change would be required.

Scottish Assessors Association (SAA) Update

Heather Honeyman provided an update referring to the publication of Proposal Disposal Date Schedules; the audit of self-catering properties and development of an online information form for self-catering with the Association of Scotland’s Self-Caterers; and the forthcoming issue of Assessor Information Notices (AINs) for licensed premises and hotels including engagement with Stephen Montgomery on that. She also noted that SAA had agreed to provide a pre-agreement window for the 2026 revaluation.

Les Robertson questioned whether SG would continue not to support public sector appeals. SG officials replied this was so, with letters shortly to be issued to public bodies funded by the Scottish Budget to reiterate this position.

Graham Howarth asked when the pre-agreement window would open. Heather Honeyman stated that discussions could start early provided ratepayers were willing and the requisite information was provided. The requirements would be published on the SAA portal and she encouraged early contact with Assessors.

Task Team Updates

The Minister noted that two task team meetings had taken place since the last sub-group meeting and SG officials provided an update.  The task team on the initial review of Empty Property Relief (EPR) met on 28 May and issues raised included the difficulty of identifying long-term empty properties using available data; the challenges of putting empty properties back into use; and the risk that the devolution of EPR could impact on property values. David Melhuish stated the biggest change had been for listed empty properties, and noted the deterrent effect this had for potential new investors.

The task team to discuss the potential for fees on appeal met on 24 July, with businesses, rating agents, Assessors and Scottish Courts and Tribunals Service represented. Points raised included a query on the purpose for introducing fees on appeal; that the appeals system should be accessible and any fees should be fair and clear; and that small businesses should not be disincentivised including suggestions that they should not be charged a fee.

It was noted that some members were against fees and others broadly in favour if this were to improve the administration of the appeals system. There was discussion around a potential fee structure and what it could be linked to e.g. rateable values, employees etc, and whether fees should be refunded with one view that they should not. A concern was raised over the risk of ‘double fees’ if multiple appeals on the same property were made, and a request made for worked examples. It was noted that the task team would meet again next week. Stacey Dingwall queried whether, in line with the New Deal for Business, the task team had sufficiently considered the issue being addressed and the concerns raised by business representatives. 

Any Other Business

Stephen Montgomery queried whether there was a cut-off for submitting Budget priorities and the Minister stated there wasn’t. SG officials called for these to be provided as soon as possible after the UK Budget.

SG officials clarified, in relation to the earlier query regarding the Tax Strategy, that colleagues were in discussion with Finance Committee clerks over the best way to engage on the Tax Strategy.