Responsiveness, fairness, certainty & consistency needed for business taxation

24th January 2020

This is an update from your chamber on some important policy work we have undertaken with the Scottish Chambers of Commerce towards ensuring a business rates system that is responsive, fair, consistent and enables long-term economic growth for business communities across Scotland.

Through engagement with us, the SCC has sent a letter to all MSPs ahead of Stage 3 of the Non-Domestic Rates (Scotland) Bill to express our views over a few transformative changes that have been made to the Bill through its progress in Parliament.

We attach a copy of that letter and would like to highlight our concern over the following:

Levying of rates to local authorities

In its current form, the Bill sets out to devolve control of the range of rate powers to local authorities, which is currently set by the Scottish Government. As drafted, this has caused significant concern with the Bill as it stands putting national reliefs such as the Small Business Bonus Scheme and the Business Growth Accelerator in jeopardy. These changes would be transformative in nature, could create an uneven playing field for businesses and create further complexity. We are aware that there are more conversations taking place around how the localisation of powers can support economic growth, and we, alongside, SCC, are committed to detailed dialogue and meaningful conversations on local level autonomy and additional powers as possible mechanisms to support businesses in Scotland.

Changes to Scottish ratepayers appeal rights

One of the major barriers to a more flexible, responsive system outside of the revaluation cycle is the ‘material change of circumstance’ appeal law. Currently, the lack of clarity on this law in Scotland means that there is no clear resolution for firms caught up in major economic events, whether that is the 2009 recession, the latest major oil and gas downturn, or potentially, a disorderly Brexit. We called for a comprehensive independent review of this law. Instead, an amendment brought forward by the Scottish Government at Stage 2 has the effect of completely removing Scottish Ratepayers appeal rights when there is a change in economic circumstances.

New assessor powers

In addition to the damaging amendment to Scottish Ratepayers appeal rights, the new powers granted to Assessors to request information from ratepayers and other parties are worrying. In particular, the level of penalties for non-compliance and short-time period for compliance appear extremely onerous, specifically for small business owners who often do not understand what information is being requested and for what purpose. The level of fines proposed have increased dramatically via amendments put forward by the Scottish Government at Stage 2 of the Bill.

If you have any comments or feedback, please feel free to get in touch and we will continue to work to ensure that your needs and views are shared with the Scottish Government and other important stakeholders.

Alan Mitchell

Chief Executive

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