Between 16 August and 12 October 2016, the Scottish Government undertook a public consultation on possible transitional relief arrangements relating to the 2017 non-domestic rating revaluation.
Non-domestic rates (often referred to as business rates) are a property tax paid by occupiers, tenants or proprietors of most non-domestic properties. The tax is devolved to the Scottish Government. Local authorities administer the system and the funds raised are used to help pay for local services.
To ensure that rates bills remain up to date, the rateable values of properties are reassessed (usually every five years) as part of a process known as revaluation. Transitional Relief is an optional system that can be put in place to manage potentially large changes in rates. As the new rates have not yet been published, the consultation asked about in principle agreement to putting a scheme in place and further questions on more specific aspects of a potential scheme.
Overall, a majority of the 52 respondents were in favour of putting a scheme in place, although this depended to some degree on whether a respondent anticipated their rates to go up or down.
The main argument given in favour of a transitional relief scheme was that it would give businesses time to plan for, and manage, their increased rates bills, and that the current challenging economic conditions made it difficult for businesses to absorb unexpected large increases in their costs.
A key argument against such a scheme was related to the principle of fairness: transitional relief was seen to be unfair and ‘contrary to natural justice’.