Please find below a comment from Brian Rogan, Head of Rating at leading property consultancy CBRE Scotland:
“We are pleased to see the Scottish Government confirm in yesterday’s budget that they will cap the increase in rates for 2018/2019 to the CPI level rather than the existing RPI basis, however a 3% increase in business rates is still a significant additional cost to doing business.
“We are also pleased that Mr Mackay confirmed he will take forward many of the recommendations made by the Barclay Review, however from our experience of the Scottish Rating system there are two technical issues which the Barclay Review dodged. These are firstly the restrictive scope of the Material Change of Circumstance legislation which puts business in Scotland at a competitive disadvantage to those in the rest of the UK where it is not so restrictive, and secondly, the impact of the so called ‘Staircase Tax’.
“The so called ‘Staircase Tax’ arose after a Supreme Court judgement ruled that businesses occupying multiple floors in multi let office buildings had to pay rates on each floor rather than having one cumulative bill. This has added significant additional costs and administrative burden to some businesses.
“In the UK Budget Phillip Hammond announced the UK Government would legislate to counter the effects of the decision. It was disappointing to see that the Scottish Government have not done likewise.
“The failure to tackle the restrictive scope of the ‘material change of circumstance’ provisions is already killing businesses in the North East of Scotland whose ability to pay rates have been impacted by the exceptional downturn in the north east economy. Unless this is changed more business could go to the wall. The continuation of the transitional relief is a sticking plaster over a major flesh wound caused by a legislative disaster that is the Scottish ‘material change of circumstances’ appeal provisions.”