Non-Domestic Rates (Scotland) Bill

AAT welcomes Scottish Government plans to reduce revaluation frequency from 5 to 3 years. However, this should only be an interim measure, with a commitment to move to annual revaluations shortly thereafter.

AAT agrees that the loophole relating to second homes must be closed. Avoiding council tax by classing the home as a business and then claiming business rates relief is clearly unacceptable. AAT suggests the Committee carefully consider the Welsh model to tackle this problem.

AAT is generally supportive of the Scottish Government’s proposed legislation. For example, in relation to proposals on new and improved homes, on restricting public parks relief, on creating a General Anti-Avoidance Rule (GAAR) and removing the exemption for independent schools.

There are many short-term improvements that can be made to the system including those the Scottish Government has proposed. However, in the medium to long term it must be recognised that the current business rates system is a 20th century system now widely viewed as not being fit for purpose in the 21st century. Wholesale reform is therefore essential.