Non-domestic rates revaluation 2023 in Scotland

Overview of changes at revaluation

At revaluation, the total rateable value on the valuation roll increased by £390 million, which is a 5.36% increase compared to the total rateable value before revaluation.

Taking into account the general revaluation transitional relief, the gross income expected to be raised in financial year 2023 to 2024 has increased by 3.37% as a result of changes to rateable values. This takes into account the poundage, supplements, and thresholds set by the Scottish Government for 2023 – 2024, including the increased threshold at which properties become liable for the Higher Property Rate.

Most of this change relates to properties for which only the rateable value changed at revaluation, but a small proportion is due to additions and removals, and to properties for which there was a change to core description. The contributions to the overall increase in rateable value are presented in Figure 2 and Table 1.0. Contributions to the overall increase in gross bills are presented in Figure 3 and Table 1.1.

Figure 2: Contributions to overall change in rateable value

Changes to rateable values

As a result of revaluation, the total rateable value on the valuation roll increased by £390 million, or 5.36% of the total rateable value on 30 March 2023. This increase is made up of three components:

• properties which remained on the valuation roll without a change in core description (mostly those for which the change in rateable value is therefore purely a result of revaluation, but it may include a small number of merged or split entries which continue to use the same reference number);
• properties added to or removed from the valuation roll; and
• properties for which the core description changed at revaluation.

Table 1.0 shows that properties remaining on the valuation roll without a change in core description saw an overall increase in rateable value of 5.09%, accounting for 5.06 percentage points (p.p.) of the total 5.36% increase. Designated utilities had an overall increase of 12.65%, which accounts for 1.30 percentage points of the 5.36% increase, and was driven mostly by electricity entries (see Table 2.3 in the associated workbook).

Table 1.0: Change in total rateable value (RV) at revaluation by type of change

Distribution of changes to rateable value

Just over half (54%) of all properties which did not see a change to core description had an increase in rateable value. The average increase for these properties was £5,842.

Just under half of all properties without a change to the core description (46%) saw either no change, or a decrease, in their rateable value. For 59,538 (23%) properties, the rateable value decreased by an average of £7,333.

The distribution of changes to rateable value is presented in Figure 4. This shows that, for most properties, the rateable value either did not change, or increased by less than 25%. While a small number of properties saw their rateable value increase by more than 500% (see Table 2.14 in the associated workbook), it should be noted that these changes are generally small in absolute terms: for example, among properties with an increase between five and ten times, the median rateable value increased from £525 to £4,300.

A small number of properties had their rateable value decreased to zero, or increased, having previously been zero. Zero-rated properties are usually those undergoing reconstruction.

Changes to gross non-domestic rates bills

The total gross non-domestic rates bill in 2023 – 2024, after general revaluation transitional relief is taken into account, is 3.37% higher than before revaluation. This is lower than the 5.36% increase in rateable value, due to the operation of the general revaluation transitional relief, which caps increases in gross bills. The composition of this 3.37% increase, by type of change, is presented in Figure 3.

Figure 3: Contributions to overall change in gross bills

Changes in gross bills are displayed in Table 1.1. Most of this increase – 3.13 percentage points (p.p.) out of 3.37% – relates to changes due to revaluation only. A further 0.24 percentage points relate to the net of additions, removals, and changes to core descriptions.

Table 1.1: Change in gross non-domestic rates bills at revaluation by type of change

Distribution of changes to gross bills

The average increase in gross bills for properties remaining on the valuation roll without a change to their core description was £2,504, with 137,858 properties (54%) seeing an increase. The gross bills reduced for 59,623 properties (23%), with an average decrease of £3,819. The distribution of changes to gross bills, as well as rateable values, is shown in Figure 4, and is also available in Table 2.14 for rateable values, and Table 3.14 for gross bills, in the associated workbook.

For just under half of all properties, the gross bill increased by no more than 12.5%. A further 6% of properties saw an increase between 12.5% and 25%. For 1% of all properties the gross bills increased by more than 25%, but not more than 37.5%. This differs from the distribution of increases in rateable value due to the general revaluation transitional relief. For properties with a rateable value of £20,000 or less the increase to gross bills was capped at 12.5%; for those with a rateable value between £20,000 and £100,000 the increase was capped at 25%; and for those with a rateable value greater than £100,000, the increase to gross bills was capped at 37.5%.

Gross bills remained the same, or decreased, for 116,919 properties, or 46% of all non-domestic properties. The general revaluation transitional relief does not limit decreases in gross bills, meaning that any decrease in rateable value leads to a proportional decrease in gross bills, without a limit. Therefore the distribution of changes in gross bills and rateable values is similar for properties which saw their rateable value decrease, with the only differences due to properties no longer being liable for the Higher or Intermediate Property Rates.

Figure 4: Distribution of changes in rateable value and gross bills

There were 232 previously zero-rated properties, which as a result of revaluation have an average gross bill of £1,726 in 2023-24. The median gross bill for these properties is £50, meaning half of them will have an annual gross bill lower than £50.