Business calls for more from review

Business rates reforms ‘need to go further’

Ken Barclay

Ken Barclay: recommended a range of changes (photo by Terry Murden)

A property adviser has expressed concern that the Scottish Government’s reforms of business rates will fail to tackle some of the most pressing concerns.

First Minister Nicola Sturgeon last week promised to implement much of the Barclay review of rates, including three-yearly revaluations.

There is concern, however, that some of the recommendations by former RBS executive Ken Barclay will not be followed through into action.

Chris Smith, property and construction specialist at Grant Thornton in Scotland, says a complete overhaul of the business rates system is required and that the demand for any changes to be “revenue neutral” needs to be re-assessed.

He warns that a failure to take a radical approach to reform could jeopardise future economic growth plans.

Chris Smith Grant ThorntonMr Smith, right, said: “The Scottish Government’s Programme for Government was bold and proactive, and many of its plans have been broadly welcomed.

“Sadly, there was little detail about what action it intends to take to tackle the business rates issue, beyond studying the Barclay Review recommendations.

“Companies of all sizes, and across all sectors, are waiting to hear what can be done to limit the impact of potentially damaging rate rises.

“Political leaders at Holyrood deserve credit for recognising that something needs to be done. But, we’re calling for them to go further and explore a complete overhaul of the system.

“Such an overhaul cannot be achieved with tax neutral reforms as such confines will always inhibit the innovative thinking required.

“A number of significant concerns remain unaddressed, including a 10% surcharge for properties vacant for five years.

“Landlords are driven by rents, so will not be voluntarily sitting on empty properties. Meanwhile, delaying the application of rates for new developments is positive, but we believe risk could be minimised further by not starting rates until the first tenant takes occupation.

“It’s heartening to see political and business leaders recognising the challenges ahead and exploring what action to take. Now is the time to explore a more radical, progressive model that is transparent, less bureaucratic and focused on encouraging a sustainable, vibrant economy in Scotland.”

The Barclay Review was launched following growing concerns from the business community that new rates, planned for April 2018, could result in a dramatic rise in costs for many companies during a period of increasing political and economic uncertainty.

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