JLL Scotland welcomes new non-domestic rates recommendations

JLL welcomes business rates recommendations to promote business growth and investment in Scotland 

Commercial property specialists at JLL in Scotland have welcomed the recommendations set out in the Government’s newly-published Report of the Barclay Review of Non-Domestic Rates.
Niall Rankin, JLL Scotland
Niall Rankin, Lead Director for Rating in Scotland at JLL said: “We broadly welcome the recommendations detailed within the Report of the Barclay Review and hope that The Scottish Government will take these proposals forward to promote business growth and investment in Scotland.
“The headline recommendation to adopt a three-year rating cycle has been eagerly anticipated and has widespread support from the Scottish Assessors and ratepayers’ advisers. If the antecedent valuation date was to move to one year prior to the valuations coming into effect it could make the whole system much more responsive to what is an ever-changing property market in Scotland.
“The very purpose of a revaluation is to fairly distribute the rates burden and the extension of the 2010 revaluation to a seven-year has been felt by significant shifts in rates liabilities. The current rating system in Scotland is notoriously unresponsive to change; appeals on the grounds of material change of circumstances are only granted in the most extreme circumstances. With this in mind, we fully welcome the recommendation to move to a three year cycle.
“The decision to use a multiplier based on CPI rather than RPI will make Scotland a more attractive place to do business and drive economic growth, by better reflecting the economic reality in the rates system. Over the last 20 years, statistics show that a multiplier based on CPI would have provided a far more stable multiplier as opposed to RPI which has been subject to more extreme fluctuations.
“In addition, it will align proposed change of policy with England. We hope that The Scottish Government will implement these recommendations in order to promote business growth and investment in Scotland.”
In a separate statement, Craig Vickery, Head of ACCA (Association of Certified Chartered Accountants) Scotland, said: “The Scottish Government must not lose sight of the original aim of the Barclay Review to support business growth and attract long-term investment. The current rate rises businesses are facing can present a short-term boost for local government coffers, reducing reliance on funding from Holyrood.
“However, this risks the knock-on effect of rising vacancies among the small and medium commercial occupiers which form the bulk of the tax base and can mean a loss of revenue over the long-term.
“Inward investment favours stability and as such, postponed revaluations, caps on rate rises lasting for one year and a myriad of hard-to-navigate reliefs have not fostered an atmosphere of financial certainty.
“While optional powers for local authorities to reduce rates in their area may help, the Scottish Government has the real power to enact change centrally and ultimately, improve the proposition for occupiers to drive up occupancy rates and increase the tax take over the long-term.”
Finance Secretary Derek Mackay said: “This report offers recommendations for reform of the system to make it work better for ratepayers across Scotland while ensuring that the contribution they make to important local services is maintained.
“Ken and his team were tasked with finding ways to improve the current system, updating it so that it better supports business growth, encourages long term investment and enables businesses to better navigate fast-changing marketplaces.
“I know the review group have worked incredibly hard, spending more than a year engaging closely with the ratepayers across Scotland before compiling this report. I would like to take this opportunity to thank them for their substantial efforts.
“Having now received the Barclay Review, the Scottish Government will respond swiftly to its recommendations.”
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