Scots councils to get new business rates powers

Councils in Scotland are to be given new powers to cut business rates later this month, deputy first minister John Swinney will announce today.

Local authorities will be able to lower rates bills for businesses in their area from October 31, under an order laid in Scottish Parliament by Scottish Ministers.

The order, which uses powers under the Community Empowerment (Scotland) Act 2015 which passed in June of this year, means councils will be able to reduce rates bills based on criteria they choose, such as the type of property, its location, occupation or activity.

Mr Swinney said: “The Scottish Government is committed to giving communities real control over their own futures. This substantial new power, which will give councils more control over business rates, and an opportunity to tailor them to their local area.

“We have already set a strong platform nationally by delivering the most competitive business taxation in the UK; for example the Small Business Bonus Scheme alone reduces or removes business rates for more than 96,000 properties. Scottish councils will be able to use these powers from the end of this month and, in contrast to England, will be able to retain all the business rates they collect.

“With these new flexibilities councils could, for example, use their local knowledge to attract new investment into town centres and help create vibrant communities where people want to live, socialise and do business.”

Councillor Kevin Keenan, COSLA’s finance spokesman, said: “COSLA welcomes the new business rate provisions in the Community Empowerment Act and while COSLA’s ambitions are much greater we see this as a positive start to the journey on increasing local flexibility of funding and taxation powers for councils.”

David Martin, Head of Policy & External Affairs at the Scottish Retail Consortium, said: “The current system of business rates has become a tax on jobs and growth and undermines investment in property, especially in town centre and high streets. There is a strong and growing consensus across business and industry that the current system is out of date and no longer fit for purpose.

“The announcement today from the Deputy First Minister, whilst not new, is welcome acknowledgment of the need to keep costs down on retailers and other businesses.

“It is, however, a missed opportunity to arrest the cost pressures and structural deficiencies in the system which undermine existing businesses and holds back new investment. We need a more imaginative approach to reform in Scotland, one which leads to business rates flexing with economic conditions and a more sustainable overall reduction in the tax burden for ratepayers.”