Non-domestic rates revaluation 2023 in Scotland

Changes by property class

As the primary purpose of a revaluation is to update the tax base to reflect changes in the property market, there are notable differences in how it affected different property classes.

Property class is a description used by the Scottish Assessors to describe the type of a property on the valuation roll, and may not necessarily reflect its use: for example, a property described as a ‘shop’ for rating purposes may in fact be used to provide financial services.

This section relates only to properties which were on the valuation roll on both 30 March 2023 and 1 April 2023, with the same core description on both dates. The total rateable value of these properties increased by 5.09% (Table 1.0), with an increase in the gross bills of 3.15% (Table 1.1).

Changes in rateable value

Figure 5 shows the change in rateable value of each property class, and Figure 6 shows their contributions to the total change in rateable value and gross bills.

The largest contribution to the overall increase in rateable value was from statutory undertakings (which include designated utilities). The rateable value of these properties increased by 14.02%, contributing 1.83 percentage points to the total growth in rateable value. This is followed by industrial subjects, where the 9.97% growth in rateable value contributed 1.73 percentage points to the total increase.

Figure 5: Proportional change in rateable value and gross bills, by property class

Changes to gross non-domestic rates bills

The overall gross bill, after general revaluation transitional relief is applied, increased by 3.15%, from £3,737 million as at 30 March 2023, to £3,855 million with rateable values as at 1 April 2023. Without the general transitional relief, the gross bill as at 1 April 2023 would have been £3,928 million.

The difference between these gross bill estimates (£73 million) is based on a snapshot of rateable values, and is unlikely to match either forecasts or the outturn for 2023 – 2024, as rateable values may change due to proposals, appeals, and changes to properties.

The proportional change to the total gross bill for each property class, and its influence on the overall gross bill, are shown in Figures 5 and 6 (see Table 3.1 in the associated workbook). Compared to changes in rateable values, increases in overall gross bills by property class are less pronounced, while decreases are more pronounced, due to the effects of the general transitional relief.

For example, the total rateable value of hotels increased by 3.15% at revaluation, but the total gross bill for this property class decreased by 0.74%, as the general revaluation transitional relief capped increases in bills for individual properties, but there was no cap on decreases.

Figure 6: Influence in percentage points, of each property class on overall change in gross bills and rateable value

A significant part of the increase in the total rateable value and gross bills can be attributed to changes in the rateable values of statutory undertakings (contributing 1.15 percentage points to the 3.15% overall increase in gross bills), and industrial subjects (1.73 percentage points). The 8.44% decrease in the gross bills for shops has a negative effect of 2.08 percentage points.

Examples of changes for specific property classes

Tables 2.7 to 2.11 (available in the associated workbook) present the changes in rateable values for five property classes – shops, public houses, offices, hotels, and industrial properties – by council area and rateable value band.

These changes are summarised in Figure 7, which presents the changes in rateable values for these classes, and for all properties, by rateable value band. The largest proportional increases in rateable value were for hotels which had a rateable value of £18,000 or below before revaluation, and for the largest industrial subjects, with a pre-revaluation rateable value of over £5 million. The largest proportional decreases were for shops with rateable values between £100,000 and £1 million before revaluation.

Data for all classes are available in Table 2.6. Tables 3.6 to 3.11 show the equivalent breakdowns for changes to gross bills. These tables are available in the associated workbook.

Figure 7: Changes in rateable values of shops, public houses, offices, hotels, and industrial properties, by rateable value band

Shops

The average rateable value of shops decreased by 8.44% at revaluation, leading to a decrease in the average gross bill for shops of 9.66%.

The rateable value increased for 20,861 shops, by an average of £3,293. While fewer shops had their rateable value decreased (19,311 properties) their rateable value decreased significantly more, by £10,402 on average.

Across Scotland, shops which had a rateable value between £100,000 and £1,000,000, saw the largest decrease in rateable value of 12.80%. The only group which saw an overall increase in rateable value were the smallest shops (those with a rateable value of £18,000 and under), for which it increased by 1.74%.

Rateable values of shops decreased most in Aberdeen City (18.23%, with gross bills decreasing by 19.12%). The largest increase was in the Shetland Islands, where the average rateable value of shops increased by 16.88%, and the gross bills increased by 6.56%.

Detailed information about changes to rateable values of shops is available in Table 2.7, and for gross bills in Table 3.7. A breakdown by property class and core description is available in Tables 2.12 and 3.12. These tables are available in the associated workbook.

Public houses and restaurants

The average rateable value of public houses and restaurants decreased by 1.22%, leading to a decrease in gross bills of 4.56%.

The highest proportional decreases were in Renfrewshire and Clackmannanshire (20.39% and 19.57% respectively), while in Argyll and Bute the average rateable value of public houses and restaurants increased by 19.47%.

Average rateable values decreased for smaller properties, with a 6.16% decrease in the total rateable value of public houses and restaurants which had a rateable value of £18,000 or less before revaluation. Rateable values increased for larger entries – for those with a rateable value between £100,000 and £1 million, the average rateable value increased by 1.52%.

A total of 872, or 26% of public houses and restaurants saw their rateable value increase by an average of £11,509, while for more than twice that number (2,076 or 61%) the rateable value decreased, by an average £5,516.

Detailed information about changes to rateable values of public houses and restaurants is available in Table 2.8, and for gross bills in Table 3.8. A breakdown by property class and core description is available in Tables 2.12 and 3.12. These tables are available in the associated workbook.

Offices

The overall value of offices increased by 3.03% at revaluation, leading to an increase of 1.59% in the average gross bill.

The rateable value increased for 17,499 offices, by an average of £5,931. For 11,382 offices, the rateable value decreased by an average of £6,440.

Offices which had a rateable value between £18,001 and £51,000 before revaluation, had the smallest average increase, of 1.09%. Offices with a pre-revaluation rateable value between £100,000 and £1,000,000, saw the largest increase of rateable value, of 4.14%.

Rateable values of offices decreased most in Aberdeen City (25.56%, with gross bills decreasing by 25.84%). In the City of Edinburgh, the average rateable value of offices increased by 19.29%, and the gross bills increased by 16.91%.

Detailed information about changes to rateable values of offices is available in Table 2.9, and for gross bills in Table 3.9. A breakdown by property class and core description is available in Tables 2.12 and 3.12. These tables are available in the associated workbook.

Hotels

For hotels (including also hostels, guest houses, bed and breakfast accommodation, and some self-catering properties), the total rateable value increased by 3.15% as a result of revaluation. The rateable value increased for 3,412 properties (63% of hotels), by an average of £7,828. For 1,415, or 26% of hotels, it decreased by an average of £12,668.

After general revaluation transitional relief is applied, the overall gross bill in 2023 – 2024 for the hotels class decreased by 0.74%.

Within this class, some of the largest increases were for hostels and self-catering properties (both with an increase in rateable value of more than 28%), while those for which both the class and core description are ‘hotel’ saw an increase in rateable value of 0.69%, and a decrease in gross bills of 1.58%.

Detailed information about changes to rateable values of hotels is available in Table 2.10, and for gross bills in Table 3.10. A breakdown by property class and core description is available in Tables 2.12 and 3.12. These tables are available in the associated workbook.

Industrial premises

Industrial premises (such as stores, workshops, and warehouses) had an increase of rateable value of 9.97%, and in gross bills of 8.01%. The rateable value increased across all rateable value bands, with the largest proportional increase shown for the largest premises: those with a rateable value of over £5 million (three properties) before revaluation saw their rateable values increase by an average of 22.41% .

Seven out of ten properties in this property class (39,963) saw an increase in rateable value at revaluation, with an average increase of £4,235, and an average increase in gross bills of £1,871.

Detailed information about changes to rateable values of industrial premises is available in Table 2.11, and for gross bills in Table 3.11. A breakdown by property class and core description is available in Tables 2.12 and 3.12. These tables are available in the associated workbook.

Designated utilities

Some assessors have responsibility for a specific group of designated utilities, and their non-domestic rates bills are issued by a specific council regardless of their geographical location. In this report, they are identified as a separate area, as they are usually entries with high rateable values, which could distort the overall changes presented in those areas.

Designated utilities are entries which usually span several assessor and council areas, such as pipelines, electricity transmission and distribution networks, or the railway network. These figures include only entries valued as designated utilities; smaller entries which are included in the local valuation roll in their area are not included.

Changes to rateable values of designated utilities by type of utility are available in Table 2.3, and changes to their gross bills in Table 3.3. These tables are available in the associated workbook.

As a result of revaluation, the rateable value of designated utilities increased by 12.65%, from £746 million to £840 million. This contributes 1.30 percentage points to the change in rateable value of 5.09% (excluding additions, removals, and changes to property types). A large majority of this relates to electricity transmission entries, valued by the Lanarkshire Assessor and billed by South Lanarkshire Council.

Figure 8: Changes in rateable values of designated utilities