Local authorities in Scotland will get new powers to cut business rates from the end of this month, as announced by deputy First Minister John Swinney.
From 31 October 2015, local authorities will be able to lower rates bills for businesses in their area, under an order laid in Scottish Parliament by Scottish Ministers.
The order, which uses powers under the Community Empowerment (Scotland) Act 2015 which became law in June of this year, means councils will be able to reduce business rates bills based on criteria they choose, such as the type of property, its location, occupation or activity.
The Policy Memorandum that accompanied that Act stated that “there will be no restrictions on this power; local authorities will be able to grant the relief to any type of ratepayer or for any reason, as they see fit.” Crucially it went on to state that any reliefs “will need to be fully funded by that authority, so it will need to balance the interests of taxpayers across its area.”
Brian Rogan, head of Business Rates in Scotland for CBRE, commented: “The news that an order has now been laid by the Scottish Government to give local authorities the ability to reduce business rates from 31 October 2015 is to be welcomed. We would hope that strategic reviews of business rates in each local authority area will now be conducted by Scotland’s councils to determine what sector, or regions within their area, can and should benefit from targeted rates reliefs.”
“We would encourage early engagement between each council and local business communities to determine how to utilise these powers to maximise local economic development.
“We can foresee challenges for councils as they try to determine how the proposed relief to be given to businesses is actually in the wider interest of council taxpayers across its area, as the legislation requires.
“Fiscal interventions in real estate markets must be carefully planned to ensure that the full extent of any benefit granted is received by the intended recipient.”