Since lockdown was first imposed in March, businesses across the North-east have been doing their utmost to adapt to new ways of working. Initiatives like the job retention scheme, the various loan schemes and dedicated grant funding streams have helped many firms to bear the brunt of initial lockdown measures. However, at the time of writing, we’re moving into what looks like a difficult winter with further restrictions at a local and national level.

Although government is responding with additional support, the only sustainable path forward is developing a coherent strategy which allows us to suppress the virus while keeping the economy moving.

As we look towards that sustainable, safe reopening of businesses, we need a renewed focus on reform in areas like taxation policy. It’s vital to ensure that we’re setting ourselves up to rebuild from a position of strength, eliminating drags on growth created by outdated systems that no longer reflect current economic conditions.

The pressing need to accelerate this type of reform is why Chambers of Commerce expressed concern at the Scottish Government’s recent decision to postpone the planned 2022 Non-Domestic Rates Revaluation until 2023.

Right now, firms across Scotland need decisive action to bring business rates bills in line with the harsh economic reality we face, not further delay. Delaying the 2022 revaluation is contrary to the core recommendation of the independent Barclay Review for more frequent revaluations, which the review recommended should take place every three years and which government accepted.

A key aim of the Barclay Review was to create a rates system which was more responsive to changing market conditions. This delay locks businesses into property values determined in 2015 for a further three years.

Furthermore, this issue of outdated values is even more pronounced in the North-east. Because values were based on a ‘tone date’ from 2015, the impact of the major oil and gas downturn at that time wasn’t reflected when values came into force in 2017, an anomaly which has continually impacted firms in the region since.

Postponing the revaluation now is made even more damaging due to the some of the provisions in the Non-Domestic Rates (Scotland) Act 2020. The Act introduced new limitations around Material Change of Circumstance (MCC) appeal rights which significantly constrain the ability of businesses to proactively appeal their values due to economic changes. This means that for many, a revaluation is the only practical route to fair values in the years ahead.

The government rationale for delay stemmed from a concern that the planned tone date, 1 April 2020, wouldn’t reflect the onset of CV19. A simple, fair and sensible solution, considering the ongoing coronavirus restrictions, would be to proceed with the 2022 revaluation but with a revised tone date of April 1, 2021. That ensures that the impact of CV19 on values is reflected, while avoiding the need for firms to wait another year for fairer rates bills.

Businesses are doing all they can to adapt to the impact of CV19. In this hugely challenging period, we need government to be flexible too and work in partnership to create the strongest possible conditions for recovery. In the months ahead, Chambers of Commerce will be making the case to ensure that the rigid non-domestic rates system doesn’t act as a barrier to growth in a post-covid world.