Non-domestic rates relief statistics 2024

About non-domestic rates and reliefs

Non-domestic rates (sometimes called business rates) are a property tax, charged on non-domestic properties. The amount that each ratepayer will pay is proportional to the determined value of their property, known as the rateable value, and may be reduced by reliefs or an exemption from rates.

The rateable value of a property broadly corresponds to the notional rental value the property could achieve in the open market, if it were vacant and available to let, taking account of the type and nature of the property.

The tax rate is set nationally by the Scottish Government, and for the financial year 2024-2025 the Basic Property Rate has been set at 49.8p for every £1 of rateable value. Properties with a rateable value greater than £51,000 and less than or equal to £100,000 are liable for the Intermediate Property Rate of 54.5p for every £1 of rateable value, and those with a rateable value above £100,000 are liable for the Higher Property Rate of 55.9p per £1 of rateable value.

Ratepayers may apply for, or in some cases can be autmatically awarded, reliefs and exemptions which reduce or remove their liability.

Reliefs are usually awarded as a proportion of the gross bill, for example reducing the gross non-domestic rates bill by 50%. Most reliefs can be combined with other reliefs, reducing the gross non-domestic rates bill by up to 100%.

Most reliefs are mandatory, meaning they have to be awarded to eligible properties following an application. This includes, for example, the Small Business Bonus Scheme, mandatory Charity and mandatory Sports reliefs. Mandatory reliefs are fully funded by the Scottish Government.

Councils have some control over the eligibility and levels at which discretionary reliefs are applied. These can be a discretionary top-up to mandatory Charity or mandatory Sports reliefs, or can be fully discretionary. They are generally co-funded by councils and the Scottish Government, with the Scottish Government usually funding 75% of the value of discretionary reliefs. Some discretionary reliefs are fully funded by the Scottish Government.

Councils may also award local reliefs under the powers granted by the  Community Empowerment (Scotland) Act 2015. From 1 April 2023, relief and rates exemptions for unoccupied properties have been devolved to councils, which may choose to offer local relief. Local reliefs are fully funded by councils, although the Scottish Government provided additional funding to councils when reliefs for empty properties were devolved.

Guidance for awarding non-domestic rates reliefs is available in Local government finance circular 5/2024, which also includes references to the relevant legislation.

In addition to properties within their council areas, some councils have responsibility for the application of non-domestic rates to designated utilities across Scotland. Designated utilities are usually large entries managed by utility companies, and are valued at a national level by designated Assessors. These are: Falkirk (docks and harbours), South Lanarkshire (electricity), West Dunbartonshire (gas), Highland (railways), Renfrewshire (telecommunications), and Fife (water). These are generally entries with very high rateable values, and may skew the proportions of relief values reported for those councils. Designated utilities are reported as a separate council area in the workbooks accompanying this publication.

Transitional reliefs

At the 2023 revaluation, three transitional reliefs were introduced to protect ratepayers from sudden large increases in non-domestic rates bills.

General Revaluation Transitional Relief

Unlike other reliefs, the General Revaluation Transitional Relief is awarded automatically to all eligible properties. It is not awarded as a set proportion of the gross bill; instead, it limits the increase in gross bills charged to a property as a result of the 2023 revaluation.

For 2024-2025, increases compared to the gross bills before revaluation are limited to 40.6% for properties with a rateable value up to £20,000; 87.5% for properties with rateable values between £20,001 and £100,000, and 140.6% for those with rateable values above £100,000. This capped gross bill is known as the 'transitional limit', and General Revaluation Transitional Relief is the difference between the gross bill and the transitional limit. If the transitional limit is greater than the gross bill, no General Revaluation Transitional Relief is applied.

When combined with the General Revaluation Transitional Relief, other reliefs are awarded as a proportion of the transitional limit. For example, in most cases mandatory Charity relief would be awarded as 80% of the transitional limit, meaning, if no other reliefs were awarded, the ratepayer would be liable for 20% of the transitional limit.

Small Business Transitional Relief

The Small Business Transitional Relief caps the increases in net bills if, following the 2023 revaluation, properties:

• are no longer eligible for SBBS relief, or
• saw a reduction in eligibility for SBBS relief, or
• are no longer eligible for mandatory Rural relief.

In 2024-2025, this increase in net bills is capped at £1,200. This means that a property which received SBBS and paid no rates before the 2023 revaluation would be eligible to apply for small business transitional relief, and not be liable for more than £1,200 in 2024-2025, regardless of the changes to its rateable value at revaluation.

This relief is applied after any other relief.

Parks Transitional Relief

From 1 April 2023, some properties in parks have become liable for non-domestic rates, having previously statutorily not been included on the valuation roll. These properties are eligible for a 33% relief in 2024-2025.