Non-domestic rates (business rates)
Upcoming reforms to the non-domestic rates system are set out in this letter.
Non-domestic rates, also called business rates, are taxes paid on non-domestic properties to help pay for local council services. We are responsible for the policy and legislative framework and set the tax rates, but individual councils administer and collect the tax.
Non-domestic rates are based on the rateable value of a property, which is determined by the independent Scottish Assessors. The amount paid is calculated by multiplying the property's rateable value by a pence in the pound tax rate known as the poundage. Reliefs such as the Small Business Bonus Scheme may reduce this amount.
The Scottish Assessors Association Portal provides the rateable values of all properties and more information on how rateable values are decided.
This Non-domestic (business) rates roadmap details key dates for changes to business rates.
Further information and guidance on non-domestic rates can be found in the local government finance circulars.
On mygov.scot we provide:
- general business rates guidance
- information on business rates appeals
- information on business rates relief
- a business rates calculator
We publish non-domestic rating accounts every financial year. View the non-domestic rating accounts from 2008 to 2017 in our archive.
We have also published a list of non-domestic rates legislation.
View additional historic information on non-domestic rates in our archive.
Scottish Budget 2022 to 2023: non-domestic rates measures
The Scottish Budget 2022-2023, published in December 2021, contains a number of measures relating to non-domestic rates. These will ensure that Scotland maintains a generous non-domestic rate regime in the UK.
The Scottish Budget 2022-2023:
- delivers a below-inflation reduction in the poundage to 49.8p
- ensures over 95 per cent of properties in Scotland are subject to a lower poundage than they would face in other parts of the UK for the fourth year in a row
- maintains a package of reliefs worth a forecasted £802 million
- delivers a 50% relief for the retail, hospitality and leisure sectors for 3 months, capped at £27,500 per ratepayer
- maintains the most generous small business relief in the UK through a continuation of the Small Business Bonus Scheme
- expands the unique Business Growth Accelerator to support our net zero ambitions by making increases in rateable value due to the installation of solar panels a qualifying improvement eligible for relief.
- extends Enterprise Areas relief by one year to 31 March 2023
- continues Transitional relief for another year for all but the largest hospitality properties in Scotland, and Aberdeen City/Shire offices to the next revaluation
Non-Domestic Rates (Scotland) Act 2020
The Non-Domestic Rates Act 2020 sets out the legislative framework to enable a number of the Barclay Review recommendations to be implemented. The Act was introduced on 25 March 2019.
The Local Government and Communities Committee was appointed as the lead committee by the Parliamentary Bureau. Information about the progress of this Act can be found on the Committee's webpage.
The Bill was passed by Parliament on 5 February 2020 and received Royal Assent on 11 March 2020.
The Barclay review: background
In 2016 we asked Ken Barclay to lead an external review of non-domestic rates, with a view to reforming Scotland's business rates system to better support growth and long-term investment and reflect changing marketplaces.
The non-domestic tax rates review: Barclay report was published in August 2017, which was followed by the Cabinet Secretary for Finance and the Constitution's Barclay review of non-domestic tax rates: ministerial response.
We published our Barclay review of non-domestic rates: implementation plan in December 2017.
In summer 2018 we ran a consultation on implementing the Barclay recommendations. An independent analysis is available at: Non-domestic rates reform: analysis of responses to consultation on Barclay implementation
The final report from the Barclay Implementation Advisory Group was published in 2019 as was the final report of the Barclay Implementation Advisory Appeal sub-Group.
Small Business Bonus Scheme (SBBS) review
The Barclay Review recommended that the effectiveness of SBBS be evaluated. It set out that the Review should be concluded, and recommendations addressed and implemented by the next revaluation. The Scottish Government accepted this recommendation and commissioned the Fraser of Allander Institute (FAI) in June 2019 to carry out an independent review of the scheme.
The overall aim of the review is to evaluate what the impact of SBBS has been and whether it can be better targeted to support local investment, employment and growth. It’s key objectives are:
- to understand who is getting the relief
- to assess the impact of the scheme on relief recipients and identify wider benefits and costs
- to consider whether the current scheme could be improved
In 2017 all rateable properties were revalued and the updated rateable values were published on the Scottish Assessors Association (SAA) Portal. Any appeals made against those values will be dealt with through the independent legal system.
The next non-domestic rates revaluation in Scotland will take effect in 2023, the same year as in England and Wales, but will be based on rental values pertaining as at 1 April 2022, and not 1 April 2020. This will mean that properties’ rateable values will better reflect true market conditions, taking into account any COVID-19 effects, and delivers our commitment to move to revaluations with a one-year tone date two years ahead of schedule.
Non-Domestic Rates (Coronavirus) (Scotland) Bill
The Non-Domestic Rates (Coronavirus) (Scotland) Bill sets out a rule for the determination of the net annual value (NAV) and the rateable value (RV) of non-domestic properties. It seeks to ensure that in calculating the NAV or RV of any properties in the 2017 valuation roll for non-domestic rates, no account can be taken of any matter arising on or after 2 April 2020 that is directly or indirectly attributable to coronavirus, expanding the policy put in place by The Valuation and Rating (Coronavirus) (Scotland) Order 2021 (S.S.I. 2021/445) which came into force on 1 December 2021. The Bill was introduced to the Scottish Parliament on 14 December 2021.
Further information on the Bill may be found on the Scottish Parliament’s website.
Contact details for all the relevant authorities are listed in non-domestic rates: contacts.