Rating Reform in Scotland

The Scottish Government announced various business rates measures in its recent Budget which have potentially serious implications for Scottish property owners and occupiers. The most relevant is the reform of empty rate relief which it appears is being reduced dramatically.  

At the moment vacant commercial properties in Scotland benefit from 100% rates relief for the first three months they are empty and unoccupied, followed by 50% relief thereafter. Vacant warehouse and industrial premises and listed buildings pay no empty rates. Mr Swinney announced that empty rates relief will be reformed in Scotland from April 2013 claiming that this is ‘to provide strong incentives to bring vacant premises back into use, reducing the prevalence of empty shops in town centres and supporting urban regeneration’.

Similar claims were made prior to major reform of empty rates relief in England and Wales in April 2008 and there is no evidence that the removal of rates relief after a short rates free period (6 months for warehouse/industrial property and 3 months for other commercial property) has reduced the number of vacant units.

It is not clear whether the Scottish Government intends to replicate the empty rates rules in England and Wales.

The only announcement that may be good news to Scottish businesses is the intention to continue the support of small businesses through the Small Business Bonus Scheme, whereby 74,000 businesses occupying small properties benefit from nil or reduced rates liabilities.

If you would like more information on your rates liability for property anywhere in the UK please contact me and I would be happy to advise further.

Fiona Shorey


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