New deal for business non-domestic rates sub-group minutes February 2025

Attendees and apologies

• Ivan McKee, Minister for Public Finance (chair)
• Liz Cameron, Scottish Chambers of Commerce
• David Lonsdale, Scottish Retail Consortium
• David Melhuish, Scottish Property Federation
• Stacey Dingwall, Federation of Small Businesses Scotland
• Mike Grieve, Night Time Industries Association
• Graham Howarth, Gerald Eve
• Paul Togneri, Scottish Beer and Pub Association
• Pete Cheema, Scottish Grocers’ Federation
• Jamie Mackie, Scottish Grocers’ Federation
• Marc Crothall, Scottish Tourism Association
• Fiona Campbell, Association of Scotland’s Self Caterers
• Heather Honeyman, Scottish Assessors Association
• William McFarlane, Scottish Assessors Association
• Brian Rout, Scottish Assessors Association
• Robert Nicol, Scottish Assessors Association
• Les Robertson, Institute of Revenues, Rating and Valuation
• Stephen Montgomery, Scottish Hospitality Group
• Scottish Government officials

Apologies

• Alan Puckrin, Inverclyde Council
• Colin Wilkinson, Scottish Licensed Trade Association
• Leon Thompson, UK Hospitality Scotland
• Jonathan Sharma, COSLA

Items and actions

Welcome and Update

The Minister welcomed members to the meeting and noted the apologies received. The minutes of the last meeting were agreed. 

The Minister highlighted the non-domestic rates (NDR) relief package announced at Budget was close to three quarters of a billion pounds in 2025-26. He acknowledged that the retail, hospitality and leisure (RHL) sectors may have been disappointed. He noted that the Public Health Supplement and Fair Work conditionality on NDR reliefs would not be taken forward at this time. 

David Lonsdale welcomed the decision not to proceed with the surtax on grocery stores or Fair Work conditionality, and the freeze to the Basic Property Rate. He noted disappointment in the lack of relief for RHL sectors. He queried whether the Scottish Government had any insight into the UK Government proposals for 2026-27 to introduce lower rates for RHL with rateable values up to £500,000 funded by a higher rate for all properties with rateable values over £500,000. 

David Londsdale enquired about the Tax Strategy commitment to explore more revenue-raising powers for local authorities. The Minister referred to consultation on a cruise ship levy. 

Stephen Montgomery stated that hospitality relief was welcome but it did not go far enough and he called for a full-scale reform of NDR. The Minister invited any revenue-neutral proposals. 

Les Robertson stated he had been at a meeting on town centre regeneration in Fife Council and reported calls for a level playing field between town centre and on-line businesses, noting that this may be a matter for the Tax Advisory Group. 

Paul Togneri noted businesses in Scotland had been at a disadvantage for a number of years and this impacted on growth and investment. He cautioned against divergence if rates for RHL in England became lower than in Scotland. He indicated support for an on-line sales tax. 

David Melhuish acknowledged there is not a level-playing field between bricks and mortar and on-line businesses. He highlighted that many bricks and mortar businesses also sell on-line and cautioned against the risk of an on-line sales tax having a negative impact on such businesses. 

David Lonsdale noted that many sectors outside retail were reliant on on-line sales e.g. financial services, insurance, hotels, etc. Stacey Dingwall agreed, noting that many small businesses with properties are heavily reliant on their on-line activity. 

Liz Cameron asked what the purpose of the group is moving forward. She suggested it was time to take stock and assess what had been achieved. She referred to the early expectation for NDR reform but acknowledged that this may never have been possible. She called for realistic expectations and highlighted the challenges of a ‘revenue-neutral’ remit. The Minister reiterated his openness to considering proposals for change, recognising the fiscal constraints. 

Jamie Mackie noted the forthcoming revaluation, and queried whether Small Business Bonus Scheme relief thresholds would be updated with inflation. Les Robertson asked when the draft roll would be available and Scottish Government (SG) officials confirmed it will be published on 30 November. 

Liz Cameron asked for clarification on previous discussions regarding improvements to the revaluation processes. SG officials noted that a survey during 2024 invited views on the proposal-lodging deadline, that responses are under consideration and an update would be provided in due course. 

Updates from Task Teams

SG officials provided an update. The task team considering the impact of reliefs met on 26 November 2024. Members received a presentation on the NDR relief statistics 2024, and were invited to share views and examples on how NDR or other support measures have helped or hindered a transition to net zero.

The task team considering fees for NDR appeals met on 16 December 2024. The potential for fees for rating appeals would be subject to public consultation and task team members would receive a draft paper shortly.

The task team on the initial review of the devolution of empty property relief was scheduled to meet on 25 March.

Liz Cameron queried whether fees on appeal would be introduced. SG officials clarified that no decision had been made and the purpose of the consultation is to inform decisions.

David Melhuish noted he had shared examples of the impact of the devolution of empty property relief on investment, and that the business case for developers seeking to redevelop empty property does not add up. 

Stephen Montgomery suggested that if there were a ‘proper’ NDR system, the number of appeals may drop. 

Graham Howarth asked when an update would be provided on the proposal-lodging deadline. SG officials stated it was intended that any legislation would be laid before summer. 

Scottish Assessors Association (SAA) Update 

Heather Honeyman provided an update. Running roll appeals lodged up to 31 March 2023 were all disposed of by the statutory deadline. Assessors continue to deal with 2023 proposals with Disposal Date Schedules published. Appeals are now being listed by the Local Taxation Chamber (LTC) with details of forthcoming hearings on the Local Taxation Chamber website.

Assessors had issued Assessor Information Notices (AINs) for licensed premises and hotels, and with a 42% response rate from licensed premises and 57% for hotels Assessors are now issuing civil penalties where information has not been returned. She noted the chair of the Commercial Properties Committee had reached out to the hospitality sector regarding the 2026 Revaluation Practice Note. 

David Lonsdale suggested raising awareness using the number and/or value of civil penalties issued.

Stephen Montgomery stated that AINs had not been issued in Dumfries and Galloway. Heather Honeyman suggested contacting the relevant Assessor. 

Mike Grieve noted that AINs are sent to company registered offices and this can create lag in the system. 

David Melhuish asked how these return rates compared to the last revaluation. Brian Rout stated that for the 2023 revaluation, as at March 2022, 43% of pubs and 37% of hotels had returned information. 

William McFarlane stated that returns for licensed premises for Glasgow are particularly low at 26% and that he would welcome any feedback.

Graham Howarth noted his office had received many AINs for clients and expressed frustration at being asked for information which had been returned in previous years. He called for a more streamlined approach. He also asked whether the Portal could be used to publish when AINs were issued. 

Fiona Campbell stated that the self-catering sector is now required to provide evidence of letting in the year. She queried whether e-mail could be used, and highlighted the difficulties of being put back on the valuation roll if removed. She asked whether the sector needs to respond to AINs when they complete an annual return. Heather Honeyman clarified that AINs may request additional information for instance on rent, and that e-mail addresses are now being requested. Brian Rout noted he was leading a review of the 2023-24 self-catering audit. 

Les Robertson noted that Fife Council offer on-line NDR accounts but take up is low. 

Heather Honeyman stated that the pre-agreement window is open until 20 February 2026, and guidance will be published on the Portal shortly. She noted the Scottish Ratepayers Forum and Scottish Rating Surveyors Forum were scheduled to meet on 6 March, and the Scottish Business Ratepayers Group on 11 March. 

Next Steps

The Minister noted a draft contribution for the Final Report of the New Deal for Business Group was included in the meeting papers and welcomed written feedback. He also invited views on the future direction of the NDR sub-group, suggesting meetings every six months, with task teams continuing as appropriate.

David Lonsdale indicated he was content with a six-month frequency, and a meeting particularly in the lead up to Budget. David Melhuish suggested quarterly if feasible. Mike Grieve noted the disappointment of his members from Budget and called for regular discussion, more often than every six months if possible. 

Stacey Dingwall suggested the need for a clearer focus, and the Minister welcomed views on this. 

The Minister confirmed he was content the sub-group continue to meet quarterly and stated the future focus would be discussed at the next meeting.