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FM announces chair and remit for review of rates system.
Small businesses have saved £1 billion thanks to the Scottish Government's small business bonus scheme.
The First Minister committed to retain the small business bonus scheme until at least 2021, telling the Federation of Small Businesses' annual conference that "we intend to keep our promise that Scotland will be the best place to do business anywhere in the UK".
The First Minister also announced that the former chair of RBS Scotland, Ken Barclay, is to lead the Scottish Government's review of business rates.
Mr Barclay will consider how business rates might better support business growth, respond to wider economic conditions and changing marketplaces and support long-term growth and investment.
The First Minister said:
"When this government came into office, we created the small business bonus. As a result almost 100,000 small business premises in Scotland now pay zero or reduced rates. In total, since 2008, the small business bonus scheme has saved businesses more than one billion pounds.
"However for all the success of the small business bonus, we know that some aspects of the business rate system are still a source of concern for some of you. The FSB's manifesto, for example, argues that the current system can sometimes discourage investment, and that it should be simplified.
"So there may well be a case for making changes – but that case needs to be considered carefully and the needs of all ratepayers must be balanced.
"That's why the Deputy First Minister announced in December that the Scottish Government would review business rates. We want to ensure that the system is as fair and effective as possible.
"I can confirm today that Ken Barclay, the former chair of RBS Scotland , has agreed to chair the group which will recommend changes to business rates. He and the other panel members will consider how business rates can support business growth; respond to wider economic conditions and changing marketplaces; and support long-term growth and investment.
"We expect the review to be completed by summer 2017. Businesses will, of course, be asked to contribute and I hope you all get involved.
"I can also make it clear that the review, and Scottish Government actions, will be guided by three clear principles.
"Firstly the intention of the review will be to make recommendations which, overall, are revenue neutral. This is not an exercise in increasing overall tax revenue, it is about ensuring taxation is fair.
"Secondly the small business bonus scheme will be retained until at least 2021.
"And finally, the business rates system should reflect the ambition I outlined at the start of this speech - that Scotland will be the best place to do business anywhere in the UK."
Ken Barclay said:
"I am delighted to accept the invitation to chair this important piece of work. This will be a detailed examination of the Scottish business rates system and I look forward to listening to the businesses who pay rates to hear their views. My aim is to identify a series of recommendations that seek to enhance and reform the system to better support business growth and reflect the economic importance of rates and changing marketplaces."
Other members will be appointed to the review in due course, and businesses and other stakeholders will have the opportunity to contribute. Work on the review will commence shortly after the Scottish elections, with recommendations expected to be submitted to Ministers by summer 2017.
The Group will work under the following remit
To explore ideas and options to improve the business rates system in Scotland to better support business growth that :
- consider how the system can respond to wider economic conditions and changing marketplaces;
- support long-term growth and investment;
- are based on overall revenue neutrality and on maintaining the overall level of funding for local government.