Non-domestic tax rates review: Barclay report

Foreword

When I was approached last year to chair a review into the non-domestic rates system in Scotland to better support business growth, long term investment and reflect changing marketplaces, it was an opportunity I accepted without hesitation.

Kenneth Barclay

Because of the breadth of types of property that pay this tax, it was apparent from the outset that I would need to listen to the views of as many stakeholders as possible, so one of the first steps in the process was to invite contributions from those who currently pay rates and equally from those who do not.

Over 150 businesses, trade bodies, professionals, ratepayers, councils and members of the public and others responded, with formal written submissions and many more sent in emails and information, subsequently.

Meetings and events were attended or hosted across Scotland to enable further views to be heard. Additionally, five oral evidence sessions were held to allow us to probe ideas and options in more depth.

All of this information and evidence had to be read, collated and scrutinised and without those contributions this review would have been impossible. I wish to thank every one of those individuals and organisations who were involved in this process and welcome the constructive way they engaged and shared ideas with us. Whilst these recommendations are the result of a year's work for this review, they draw on and incorporate the ideas and views of many experts and ratepayers who have decades of experience in both the rating and valuation fields and in running successful businesses.

Equally, I could not have done any of this without the considerable time, expertise and insight provided by my colleagues. David, Isobel, Nora and Russel have exemplar commitment to public service and I wish to thank them for their commitment and dedication and acknowledge the considerable amount of their time they gave freely to undertake this process.

I am pleased to outline the results of my review here in this report which contains 30 individual recommendations on how the rates system could be reformed in Scotland.

These include the creation of a delay of a year before rates liability is incurred when a property is improved, expanded or newly built, 3 yearly revaluations, reduction in the large business supplement and a new relief for nurseries. These measures will benefit the entire tax base - public and private sector and large and small businesses alike.

Whilst these recommendations address some of the most frequent and high profile complaints we heard from ratepayers, it's important not to underestimate the impact administrative changes can have to the ratepayer. By making a series of recommendations to reduce the administrative burden on businesses we can also support economic growth by freeing up time to allow them to do what they do best - growing the economy.

Under my revenue neutral remit, this all, of course has to be funded and I set out a number of measures to do so. These revenue raising measures may not be popular with some. They are not about penalising particular sectors. They are about removing anomalies, creating a level playing field and reducing avoidance.

All of the 30 recommendations combined will, I believe, improve the economic climate in Scotland and give Scotland a competitive advantage in growing existing businesses and attracting new business.

I now pass these recommendations to Scottish Ministers for their consideration.

Kenneth Barclay, Chair