Parts of a property used exclusively to house recycling machines to deposit returnable bottles and cans will be exempt from business rates.

The Scottish Government announced the update on the deposit return scheme as part of a series of measures to ease costs and tackle non-payment.

It also aims to empower councils to crack down on tax-avoidance such as the artificial use of insolvency, leasing arrangements or shell companies.

Owners of business properties will be made liable for payment, rather than the property’s occupiers, and allow for liability for payment to be backdated if an offence is repeated within a five-year period.

In a separate move, parts of properties solely used to house reverse vending machines, which refund users for recycling drinks containers, would be exempt from business rates. The government says this will support businesses to get ready for Scotland’s deposit return scheme.

Further amendments to business rates are promised in the Scottish Budget, will be published shortly as part of a package of regulations to provide more help for businesses through the current cost of living crisis.

Public Finance Minister Tom Arthur said: “The Scottish Government is committed to a fair and transparent system of non-domestic rates which supports businesses and communities.

“It is important that everyone pays their share and these regulations will help tackle those who seek to find loopholes to avoid payment.

“We want to ensure that parts of properties used for reverse vending machines are not liable to pay rates. This will incentivise and promote Scotland’s Deposit Return Scheme which will launch on 16 August this year.

“Subject to the regulations passing in the Scottish Parliament, we will work to ensure Scotland’s non-domestic rates system remains progressive and in line with our net zero ambitions.”

The Scottish Retail Consortium has demanded ministers provide a blueprint by the end of this month outlining how the deposit return scheme will operate.

There has been a widespread backlash agains the scheme, with Innis & Gunn founder Dougal Sharp accusing operator Circularity Scotland of ‘extortion’ by demanding providers pay up to £1.5m a month to bankroll the scheme.