A Scottish Parliament review into business rates has started today, including proposals that have been causing concern to independent schools.
The Scottish Parliament is considering reforming the system and is now calling for feedback from the public on the plans. This process will addresses non-domestic rates, but not independent schools’ charitable status.
Non-domestic rates are levied on business properties, dependent on the assessed value of the building, and are the second-highest source of tax income for the Scottish government.
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Following a review into the system by former RBS chief Ken Barclay, which made a series of recommendations to reform non-domestic rates in Scotland, a Bill has been introduced in the Scottish Parliament.
It proposes carrying out valuations every three years, rather than the current five-year period, and tackling known tax avoidance, including tactics involving unoccupied or under-used properties.
The Bill, put forward by finance, economy and fair work secretary Derek Mackay, also recommends that independent schools should no longer be able to claim charitable relief, which would amount to £37 million between 2020 and 2025, it suggests.
Under the current system, independent schools with charitable status pay 20 per cent of their rates bill, while local authorities have the discretion to charge them nothing.
The Scottish Parliament’s Local Government and Communities Committee will examine the potential impact of the Bill.
Committee convener James Dornan said: “Non-domestic rates are the second-highest revenue-raising tax in Scotland, and these reforms could affect a great number of people.
“We are keen to hear the views of potentially affected organisations and members of the public about the proposed changes to the system, and whether the government has addressed the issues raised in the Barclay Review.”
Mr Dornan added: “We also want to know if people think anything else should be included in this Bill or if more radical reform of the system is needed.
“We look forward to hearing what the public has to say and using the evidence to ensure our inquiry is as robust as possible.”
Details on how to make a submission to the review can be found on the Scottish Parliament website. The deadline is 30 May.
