Empty property surcharge not in planned business rates legislation

A surcharge on empty properties will not be included in proposed legislation in a shake-up of business rates, the Scottish Government has announced.

Introducing a 10% surcharge on empty properties after five years was one of 30 recommendations made by former RBS Scotland chairman Ken Barclay in his review of business rates.

The Barclay Implementation Advisory Group’s final report published on Friday disagreed with his belief this would encourage properties back into productive use and instead said it would “simply further penalise ratepayers holding on to currently unproductive properties”.

The also said the Scottish Government should publish a national list of rates relief recipients to improve transparency, increase awareness of relief availability and help to tackle fraudulent claims.

The group agreed that a new civil penalty should be made available to councils to act as a deterrent to withholding information.

The government said the empty property surcharge will not be taken forward into the proposed Non Domestic Rates (Scotland) Bill due to be introduced at Holyrood before Easter.

The Bill will propose making provision for three-yearly valuations after the 2022 revaluations, maintain the Business Growth accelerator to encourage businesses to expand and reform the appeals system to reduce speculative appeals.

Other planned changes in the legislation include closing down tax avoidance tactics and ending rates relief for mainstream independent schools.

A planned pilot scheme for some councils to increase rates on out of town and online businesses was earlier dropped by Finance Secretary Derek Mackay.

The government also published an analysis of responses on Friday to a consultation on Barclay review recommendations requiring legislation, which ran for around three months, closing in September 2018.

The report said: “A recurring theme in the consultation responses was that proposed changes to non-domestic rates policy, and consequent legislation, needed to be clearer.”

The advisory group strongly supported the recommendation for provision of better information on rates for ratepayers.

Information currently provided by local authorities was said to be “inconsistent in content and quality” and the group said the Scottish Government should improve the information on its website.

Public Finance Minister Kate Forbes said: “We are making good progress in reforming the business rates system to help us maintain a competitive advantage for Scottish ratepayers and support the Scottish economy.

“I welcome the engagement of all stakeholders in the process so far and hope this will continue as the bill makes its way through Parliament.

“The bill provisions are designed to stimulate the economy, reduce red tape, improve transparency and reduce tax avoidance.

“These provisions, alongside others in the budget, strike the right balance between offering a competitive and sustainable taxation environment while delivering sufficient resources to fund vital public services.”

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