Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Bill: child rights and wellbeing impact assessment

Child Rights and Wellbeing Impact Assessment - Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Bill

Brief Summary

Non-domestic rates (sometimes referred to as “business rates”) (NDR) are a tax based on property in the private, public and charitable sectors, which is charged in order to help pay for the very wide range of services that councils deliver (such as education, social care, waste management, local roads management and cultural services). The amount that each ratepayer will pay depends – in the first instance - on the determined value of their property. The value of each property on the valuation roll is assessed by the local independent Scottish Assessor – and referred to as its “rateable value”. Some properties are exempt from non-domestic rating such as agricultural lands and buildings.

NDR are administered and collected by councils. The pre-relief rates bill is determined by multiplying the rateable value of the property by the rate that applies to that property. The rate is a “pence in the pound” rate set annually by the Scottish Government (so a 49.8p rate means 49.8p is paid on each £1 of rateable value). The same national tax rates apply across Scotland. There are three rates, the Basic, Intermediate and Higher Property Rates depending on a property’s rateable value.

NDR are expected to raise over £3 billion in 2025-26. NDR revenue is pooled at a Scottish Government level and redistributed back to local authorities to help fund local services. The Scottish Government then distributes additional central government grants to each local authority according to a needs-based formula that has been agreed by the Convention of Scottish Local Authorities (COSLA) on behalf of Scotland’s 32 local authorities.

The Non-Domestic Rates (Scotland) Act 2020 (the 2020 Act) made changes to the law relating to NDR. Among other things, it repealed section 24 of the Local Government (Scotland) Act 1966. Section 24 of the 1966 Act provided that non-domestic rates are not payable in respect of unoccupied properties, but gave the Scottish Ministers regulation-making powers to apply a lower rate of NDR (between 50% and 90% of the rates otherwise payable) to such properties. The repeal of section 24 was intended to create a situation whereby owners of unoccupied property would, as a default position, be expected to pay NDR for those properties, and local authorities could then reduce their bills (known as granting ‘relief’) as they considered appropriate using powers they already have under other legislation (specifically, section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962). Section 24 was repealed with effect from 1 April 2023.

However, it has come to light that the 2020 Act did not have the intended legal effect and there has not been a valid legal basis for requiring owners of unoccupied properties to pay NDR in respect of those properties since 1 April 2023. The amount of NDR revenue involved is estimated at around £300-£350 million between April 2023 and September 2025.

The Bill which this CRWIA is assessing will put in place a legal basis for the owners of unoccupied properties being liable to pay rates, and will backdate that liability to 1 April 2023. This will restore the intended policy effect of the 2020 Act, by making owners of unoccupied property liable for payment of NDR from 1 April 2023. Without the Bill, NDR revenue collected from owners of unoccupied property could not be collected going forward, and rates paid from 1 April 2023 would have to be refunded.

Non-Domestic Rates (Liability for Unoccupied Properties) (Scotland) Bill

Start date of proposal’s development: 16 September 2025

Start date of CRWIA process: 30 September 2025

With reference given to the requirements of the UNCRC (Incorporation) (Scotland) Act 2024, which aspects of the proposal are relevant to/impact upon children’s rights?

The Bill will only affect owners of commercial or other non-domestic property, and more specifically will only affect owners of commercial or non-domestic property that has been unoccupied for a period of time since 1 April 2023.

It is highly unlikely that owners of non-domestic property will be under 18 and therefore be the ratepayer for non-domestic rates purposes. The Bill is accordingly unlikely to relate to children and young people’s rights directly, in their capacity as taxpayers.

The Bill may indirectly affect children by impacting upon their parents or guardians, if their parents or guardians own commercial or other non-domestic property that has, at any point since 1 April 2023, been unoccupied for a period of time.

There is no data on whether or how many owners of commercial or other non-domestic property have children, and so no data on how children may be impacted by the Bill.

If the Bill is not passed, parents or guardians who had paid NDR for unoccupied properties may be eligible for refunded payments of rates which will bring income back into those households on a short-term basis. However, those payments will have to be made by councils, with their losses being refunded by Scottish Government. Given the scale of the figures involved, there is potential for budget destabilisation across local government and Scottish Government, until such time as losses have been made up (by whatever means is identified). Any such destabilisation is likely to impact the most vulnerable in society who have greatest need of the resources offered by public authorities. This would include children, particularly those living in poverty, who would bear the brunt of potential revenue and service losses over a period of years. This would balance out any positive short-term impacts on the children of households that benefited from the repayment of NDR.

On balance therefore, the impact of the Bill on children as a whole is assessed as neutral, as it will maintain the budgetary status quo, avoiding the potential long-term impact of budgetary destabilisation, that could put at risk services that support children and their families, especially those living in poverty.

Please provide a summary of the evidence gathered which will be used to inform your decision-making and the content of the proposal.

Not applicable.

Further to the evidence described above have you identified any 'gaps' in evidence which may prevent determination of impact? If yes, please provide an explanation of how they will be addressed.

Not applicable.

Analysis of Evidence.

Not applicable.

Conclusion

As a result of the evidence gathered and analysed against all UNCRC requirements, what is the potential overall impact of this proposal on children’s rights?

Neutral / Positive

If you have identified a positive impact on children’s rights, please describe below how the proposal will protect, respect, and fulfil children’s rights in Scotland.

Not applicable.

If a negative impact has been identified please describe it below. Is there a risk this could potentially amount to an incompatibility?

Not applicable.

Mitigation Record

What options have been considered to modify the proposal in order to mitigate a negative impact or potential incompatibility?

Issue or risk identified and relevant UNCRC requirement: None

Action Taken/To Be Taken: Not applicable

As a result of the evidence gathered and analysed against all wellbeing indicators, will the proposal contribute to the wellbeing of children and young people in Scotland?

Safe: Not Applicable

Healthy: Not Applicable

Achieving: Not Applicable

Nurtured: Not Applicable

Active: Not Applicable

Respected: Not Applicable

Responsible: Not Applicable

Included: Not Applicable

How will you communicate to children and young people the impact that the proposal will have on their rights?

The CRWIA will be published alongside the Bill so those wishing to access it can do so. The CRWIA has been written insofar as possible in accessible language so those reading it can understand its content and the absence of impact in the assessment.

Post Assessment Review and sign-off

Planning for the review of impact on children’s rights and wellbeing

If new information comes to light throughout implementation, this will be assessed for potential impact on children and young people. However, this is not anticipated due to the nature of the instrument.

Sign off

Policy Lead Signature & Date of Sign Off: Anouk Berthier, October 2025

Deputy Director Signature & Date of Sign Off: Ellen Leaver, October 2025