Scottish Budget 2023/2024 – Non-Domestic Rates
Non-Domestic Rates
Non‑domestic rates (NDR), often described as business rates, are a local tax levied on lands and heritages used for non‑domestic purposes in the public, private and third sectors. NDR are administered and collected by local authorities, who retain all the NDR revenue they raise to help fund the local services they provide. National NDR tax rates and reliefs are confirmed annually by the Scottish Government.
- The Basic Property Rate (‘poundage’) will be frozen at 49.8p
- The number of properties which are liable for the Higher Property Rate will be reduced by increasing the rateable value threshold at which this rate applies, from £95,000 to £100,000.
The Non-Domestic Rates are summarised below:
| Non-Domestic Rates | |
| Basic Property Rate (‘Poundage’) | 49.8p |
| Intermediate Property Rate (rateable values between £51,001 and £100,000) | 51.1p |
| Higher Property Rate (rateable value above £100,000) | 52.4p |
Reliefs
- To encourage regeneration including in town centres, the Fresh Start relief will be extended by raising the rateable value threshold at which properties qualify for the relief from £95,000 to £100,000
- Properties already in receipt of Fresh Start relief on 31 March 2023 will also continue receiving relief for the remaining duration of the relief award regardless of whether the new rateable value is above the new qualifying threshold
- The Small Business Bonus Scheme (SBBS) relief will be reformed and the eligibility criteria extended
100% relief will be available for properties with a rateable value of up to £12,000 (currently £15,000)
The upper rateable value for individual properties to qualify for SBBS relief will be extended from £18,000 to £20,000
SBBS relief will be tapered for properties with a rateable value between £12,001 and £20,000: relief will taper from 100% to 25% for properties with rateable values between £12,001 to £15,000; and from 25% to 0% for properties with rateable values between £15,001 to £20,000.
Cumulative rules will remain in place including the £35,000 cumulative rateable value
Car parks, car spaces, advertisements and betting shops will be excluded from eligibility for SBBS from 1 April 2023.
Recognising the impact of the revaluation and of reforming the SBBS relief thresholds, The Scottish Government will offer a Small Business Transitional Relief to ensure that properties that lose SBBS or Rural rates relief eligibility do so in a phased manner.
For those losing or seeing a reduction in these reliefs (including due to the above exclusions introduced for SBBS relief) on 1 April 2023 the maximum increase in the rates liability relative to 31 March 2023 will be capped at £600 in 2023‑24, rising to £1,200 in 2024‑25 and £1,800 in 2025‑26.
A Revaluation Transitional Relief will be introduced to protect those most affected which will cap rates increases up to the next revaluation in 2026:-
| Proposed year-on-year Scottish 2023 Transitional Relief caps (%) | |||
| Rateable Value | 2023-24 | 2024-25 | 2025-26 |
| Small (up to £20,000) | 12.5 | 25 | 37.5 |
| Medium (£20,001 to £100,000) | 25 | 50 | 75 |
| Large (Over £100,000) | 37.5 | 75 | 112.5 |
To support the attainment of the Scottish Government’s Net Zero targets and incentivise investment in renewables, a non‑domestic rating exemption will be introduced. This exemption will be for prescribed plant and machinery used in onsite renewable energy generation and storage in Scotland from 1 April 2023 until 31 March 2024.
Day Nursery Relief, which was due to end on 30 June 2023, has been extended indefinitely.
Enterprise Areas relief will be extended by one year to 31 March 2024.
Empty Property Relief is being devolved to local authorities on 1 April 2023.
All the other existing NDR reliefs will be maintained in 2023/2024.
Scottish Budget 2023/2024 – Scottish Income Tax Rates
Scottish Budget 2023/2024 – LBTT and ADS
Photo by Kelly Sikkema on Unsplash
The information in this blog provides only an overview of Scottish Government guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed Scottish Government guidance and legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.
