The Scottish Government Non-Domestic Rating Account: year ended 31 March 2021

Notes to the Account

1. The "Non-domestic Rating Account" for each financial year is audited by Audit Scotland appointed by the Auditor General for Scotland. It shows, as items of account (rather than actual cash), sums paid to and from the account during 2020-21 (Schedule 12, paragraph 7). The surplus or deficit in any financial year is carried forward to the next financial year as shown in the Statement of Balances. (Schedule 12, paragraph 8). The balance on the account is taken into consideration when calculating the distributable amount. This ensures, that when financial years are taken together, all non-domestic rates paid to Scottish Ministers are redistributed to authorities.

2. Each levying authority is required to calculate the non-domestic rating contribution for the year before it begins (the provisional amount; Schedule 12, paragraph 11(2) as amended by paragraph 176(19c) of Schedule 13 to the Local Government etc (Scotland) Act 1994) and the authority is required to do a final calculation after the year ends (Schedule 12, paragraph 11(5)). The provisional amount is paid during the year in such instalments as Scottish Ministers direct (Schedule 12, paragraph 11(4)). Contributions from authorities in respect of the provisional amount for 2020-21 totalled £1,916 million.

3. Scottish Ministers paid out the Distributable Amount of £1,868 million for 2020-21 (Schedule 12, paragraph 9) as set out in the Local Government Finance (Coronavirus) (Scotland) Amendment Order 2020. The Distributable Amount is paid to authorities in proportion to each local authority's 2019-20 mid-year non-domestic rates income return net of any prior year adjustments. Due to the impact of COVID-19, we took the unique measure of adjusting for the impact of the 2020-21 Mid-Year Estimates provided by local authorities which resulted in a net loss of income compared to the previously agreed provisional contributable amount of £1,916 million. This resulted in a net additional payment of £4.416 million.

4. Due to the nature of the non-domestic rates returns cycle the interim returns for any given year are received after the Account is prepared. By 31 March 2021 all interim payments (£141.2 million) and interim receipts (£12.5 million) in respect of interim adjustments to the provisional contributable amounts for 2019-20 had been completed. They are, therefore, included within this Account.

5. The figures for 2020-21 are net of the sums totalling £5.640 million retained by local authorities under the Business Rates Incentivisation Scheme in respect of the year 2018-19.

6. The accounts are prepared on a receipts and payments basis in accordance with the requirements of the Local Government Finance Act 1992.

Paul Johnston

Accountable Officer

Director General Communities

15 December 2021