5 Other comments
5.1 There was a recurring view among respondents that any transitional relief scheme, if introduced, should not prevent necessary wider reforms to the non-domestic rates system currently being considered by the Barclay Review. Some respondents - in addition to their comments regarding the first three questions in the consultation - also made a range of other comments at Question 4 which were related to this wider review. Most, though not all, of these comments were made by private sector companies or umbrella groups.
5.2 This chapter provides a brief summary of the main points raised. Respondents often stated that they had submitted these same comments directly to the Barclay Review. The most common themes were that:
- A lack of flexibility in the non-domestic rates system was seen to be a significant problem in a time of great economic uncertainty. There were calls for more frequent (3-yearly) revaluations, with a tone date set no earlier than one year preceding the revaluation. Respondents repeatedly stated that this would enable the business rates system to respond more effectively to changes in local markets, and would benefit businesses by avoiding large fluctuations in rates at each revaluation. Respondents did not see high levels of rates as a problem if these accurately reflected property values. However, sudden increases, or prolonged billing at an inappropriately high level was seen to be damaging for businesses.
- Following on from the previous point, draft Valuation Rolls should be published at least six months before revaluation to allow businesses sufficient time to consider the impact and take action to mitigate any large increases in their rates bills.
- There were concerns about the differences in the administration of non-domestic rates in England and Scotland. These differences related not only to the availability of transitional relief, but also in the decapitalisation rate and the Large Business Supplement. Because of these differences, respondents believed that the non-domestic rating system in Scotland was becoming increasingly uncompetitive for businesses compared to England.
- There was too much complexity in the non-domestic rates system and there were calls for the system to be simplified. Various respondents commented that legislation governing rates is spread over many different Acts and Regulations, and was considered to be 'virtually indecipherable'. Respondents also often referred to the legal case, Mazars v Woolway, and - while they were unclear about the precise nature of the impact of this case in Scotland - they nevertheless anticipated that it would introduce further complexity into the system.
5.3 Other comments, usually made by just one or two respondents, included that:
- Non-domestic rates should be returned to local government control to ensure a more democratic link between local spending decisions regarding services and the businesses that pay for those services.
- In future revaluations, new investments in plant and machinery should be exempt from rates to encourage productive investment.
- There was also a more general point made that the rates system, like other taxation, should encourage investment and economic growth to benefit the wider Scottish economy.