Scottish Budget Business Rates Announcement 2022
16 December 2022
The headline from John Swinney’s budget statement is non-domestic rates UBR in Scotland being frozen at 2022/23 levels. This has been welcomed by business organisations who had been lobbying for the freeze. There is also an increase to the intermediate threshold. From 1 April 2023 UBRs for 2023/24 will be:
- Basic Property Rate ('Poundage') 49.8p
- Intermediate Property Rate (rateable values between £51,001 and £100,000) 51.1p
- Higher Property Rate (rateable value above £100,000) 52.4p
Our Business Rates experts have examined the details that came out following the budget statement to provide this summary of the changes from 1 April 2023:
The SBBS (Small Business Bonus Scheme) has been overhauled and changed:
- 100% relief will be available for properties with a rateable value of up to £12,000 (currently £15,000) and the upper rateable value for individual properties to qualify for SBBS relief will be extended from £18,000 to £20,000.
- To improve the design of the scheme, SBBS relief will be tapered for properties with a rateable value between £12,001 and £20,000: relief will taper from 100% to 25% for properties with rateable values between £12,001 to £15,000; and from 25% to 0% for properties with rateable values between £15,001 to £20,000.
- Cumulative rules will remain in place including the £35,000 cumulative rateable value threshold.
- Car parks, car spaces, advertisements and betting shops will be excluded from eligibility for SBBS from 1 April 2023.
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Small Business Transitional Relief |
Provided to ensure that properties that lose SBBS or Rural rates relief eligibility do so in a phased manner. |
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Business Growth Accelerator Relief |
Updated to account for the revaluation and properties in receipt of this relief on 31 March 2023 will continue to be eligible for an equivalent percentage of relief on the new rateable value for the remaining duration of the relief. |
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Fresh Start Relief |
Expanded by raising the rateable value threshold at which properties qualify for the relief from £95,000 to £100,000. Properties already in receipt of Fresh Start relief on 31 March 2023 will also continue receiving relief for the remaining duration of the relief award regardless of whether the new rateable value is above the new qualifying threshold. |
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Revaluation Transitional Relief |
Introduced to protect those most affected and cap rates increases up to the next revaluation in 2026. |
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Non‑domestic rating exemption |
For prescribed plant and machinery used in onsite renewable energy generation and storage has been introduced to support the attainment of Net Zero targets, and incentivise investment in renewables, introduced from 1 April 2023 until 31 March 2035. |
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Day Nursery Relief |
Was due to end on 30 June 2023, has been extended indefinitely. |
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Enterprise Areas Relief |
Extended by one year to 31 March 2024. |
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Empty Property Relief |
Being devolved to local authorities on 1 April 2023. Local authorities will have full discretion over Empty Property Relief for Non‑Domestic Rates supported by £105 million added to the settlement to support local priorities including the option to develop local relief schemes. |
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Retail, Hospitality & Leisure Relief |
Has been continued in England but there is no mention of it being continued in Scotland. |
Mr Swinney also announced the government is bringing forward regulations intended to empower councils to tackle rates avoidance more effectively, all other existing NDR reliefs will be maintained in 2023‑24 and NDR reliefs are subject to the domestic subsidy control regime.
Lorna Greig, Rating Partner, commented:
“While the freeze of the poundage at 2022/23 levels will be welcomed by many companies there are other aspects to yesterday’s announcement that will be of concern to small businesses. The overhaul of the Small Business Bonus scheme, with the relief threshold being reduced from £15,000 to £12,000 will have an impact. There is a transition period but some businesses are still likely to be affected.”
