The Scottish Government delivered its Budget on 19 December 2023 which will have implications for business rates from 1 April 2024. Our Head of Rating, Richard Foster, sets out the headlines below.
- The Basic Property Rate of 49.8p applied to Rateable Values up to and including £51,000 will be frozen for 2024-25, however, the Intermediate and Higher Property Rates will increase in line with inflation:
- Intermediate Property Rate - Rateable Values over £51,000 up to £100,000 will be charged at 54.5p (the multiplier for 2023-24 is 51.1p)
- Higher Property Rate - Rateable Values over £100,000 will be charged at 55.9p (the multiplier for 2023-24 is 52.4p)
- Hospitality businesses in Scotland’s Islands, as defined in the Islands (Scotland) Act 2018, will be given 100% rates relief from 1 April 2024, capped at £110,000 per business ratepayer.
- The Small Business Bonus Scheme will continue and Small Business Transitional Relief will also be maintained.
- District Heating relief will be extended to 31 March 2027 and will be expanded to include all district heating systems, where at least 80% of thermal energy derives from renewable sources.
- From 31 March 2024, Enterprise Areas relief will be phased out over two years, but all other reliefs will be maintained.
- The decision to devolve Empty Property Relief to councils effective from 1 April 2023 will continue in 2024-25. Most councils in Scotland in 2023-24 maintained the levels of relief previously set by the government. It is anticipated that councils will review their schemes afresh for 2024-25, with Listed Building relief in particular under pressure. The details of local unoccupied property relief schemes from 1 April 2024 therefore remain uncertain.
FG Burnett's Head of Rating, Richard Foster observes:
“Business Rates has been the clear target as a mechanism to help plug the Scottish Government’s budget deficit. Whilst I welcome the freeze to the Basic Property Rate and the decision to grant 100% relief for hospitality businesses on the Islands, the decision to offer no support for hospitality businesses, or those in the retail and leisure sectors, on the Mainland is disappointing. All businesses in these sectors in particular have been under significant pressure following Covid-19, compounded by rising operational costs. Perhaps most pertinent is it reflects a continuing and hugely disparate position with that south of the border. There, all businesses in the retail, leisure and hospitality sectors will continue to receive 75% rates relief for 2024/25 (also similarly capped), as they have during 2023-24, where no such support was available in Scotland. This puts Scotland in a very uncompetitive position for businesses in these sectors and many, regardless of sector, will see a rise in their rates bills due to increases in the Intermediate and Higher Property Rates”.
“Our aim is to support clients to manage their business rates and reduce rates liability as far as possible. 2024 is set to be a busy year as we continue to work with clients to achieve that aim”.