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Business rates reduction

Rates Relief

Small Business Bonus Scheme

The Small Business Bonus Scheme has been amended from 1st April 2010 to reflect the 2010 Revaluation to provide relief to businesses with properties in Scotland of which the combined rateable value is £18,000 or less.

In addition, where the cumulative value of a businesses’ properties falls between £18,000 and £25,000 (£35,000 from 1 April 2014), the scheme offers 25% relief to individual properties with a rateable of £18,000 or under.

Properties used for payday lending, as defined by the regulations, may not be granted small business bonus scheme rates relief.

Combined Rateable Value of all business properties in Scotland Percentage relief available
Up to £10,000 100%
£10,001 to £12,000 50%
£12,001 to £18,000 25%
Upper limit for cumulative RV 25,000 25%

Fresh Start Relief

The Fresh Start Relief scheme offers 50% relief for up to 1 year for new occupation of certain retail shop, office, hotel, pubs or restaurant premises that have been empty for at least a year. The relief can be applied if the following circumstances are all met for the property:

  • The property has previously been in receipt of empty property relief for a continuous period of at least 12 months; and
  • The property has a rateable value of under £65,000; and
  • When last occupied, the property was used as a shop, office, hotel, pub or restaurant (as defined in the Regulations) regardless of what the intended future use is to be OR where there has not been a last use, that the property is intended to be used as a shop, office, hotel, pubs or restaurant.

Properties used for payday lending, as defined by the regulations, may not be granted fresh start rates relief.

If you wish to apply, please download a Fresh Start Relief application form.

New Start Relief

New Start Relief is offered for new properties built since 1 April 2013 that remain unoccupied. The ratepayer can apply for 100% rate relief for up to 18 months whilst it is unoccupied. There is no upper rateable value cap for property, but the relief is capped under State aid de minimis meaning no business can receive more than €200,000 over a rolling 3 year period.

The relief can be applied if the following circumstances are all met for the property:

  • The property is entered onto the valuation roll between 1 April 2013 and 31 March 2017.
  • The property is unoccupied at the time of entry on the valuation roll.
  • The new entry is not as a result of a combination or division of existing entry on the valuation roll or due to the refurbishment or change of an existing entry on the valuation roll (including conversion of a domestic property or a property previously exempt from rating).

The relief need not apply to a continuous period, and can apply if the property is unoccupied on or before 31 March 2019.

If you wish to apply, please download a New Start Relief application form.

Empty Property Relief

From 1 April 2016: unoccupied industrial property may be due 100% rates relief for an initial six months period, although thereafter have to pay 90% of the rates liability that would have arisen were the property occupied; unoccupied non-industrial property may be due 50% relief for an initial three months period, but thereafter have to pay 90% of the rates liability that would have arisen were the property occupied. However some properties e.g. listed buildings; occupation prohibited by law; property with a rateable values of less than £1,700; are exempt from the 90% empty property rate levy and do not have to pay non-domestic rates at all. All unoccupied properties, other than those that are exempt, are due a maximum of 10% relief after the initial 3 or 6 month period, paying an empty property rate of 90% of the gross rates charge.

Up until 31 March 2016, all unoccupied property was, for an initial three months period, due 100% relief on the rates liability that would have arisen were the property occupied, and thereafter liable to pay 90% (the empty rate was 50% prior to 1 April 2013).

Businesses that occupy a property, but only trading on a seasonal basis at certain times of the year, would not qualify for empty property relief.

Part of a property is not being used and is completely unoccupied for a short time

As short term empty property relief is granted at the discretion of the Council, each Council may have a different policy in place. South Ayrshire Council policy is to award this relief to former industrial premises only, where the value of the unoccupied part is greater than 5% of the total rateable value, and for a maximum period of 3 months per financial year. Download a partly unoccupied property application form.

Mandatory Relief for Registered Charities

Where an organisation is a registered charity and the property occupied by the organisation is used "wholly or mainly for charitable purposes", there may be an entitlement to 80% mandatory rates relief. It is not sufficient that a property is owned by a charity - the Council must determine whether a property is being used "wholly or mainly for charitable purposes". Charity shops must be able to demonstrate that they are used wholly or mainly for the sale of donated goods.

Using the discretionary powers available to it, the Council's policy is to top-up the 80% mandatory relief with a further 20% discretionary relief. Download a mandatory and discretionary relief application form.

Discretionary Rates Relief - Non-profit Making Organisations

Councils have discretionary powers to grant up to 100% rate relief to non-profit making organisations, whether they are registered charities or not. To qualify, an organisation must either be charitable, religious, or concerned with education, social welfare, science, literature or the fine arts, or the property must be used by a non-profit-making organisation and used wholly or mainly for the purpose of recreation (sport). Recreational or sporting organisations licensed to sell alcohol may also apply for relief, although the amount of relief awarded will reduce proportionally with respect to bar turnover and catering sales.

At a meeting of the Council's Leadership Panel of 24 September 2008, members approved a change to the Council's Discretionary rates relief policy. This was necessary because of the legal obligations imposed on local authorities through the Equality Act 2006. It was also considered appropriate that any revised policy should accord with the Council's Gender Equality Scheme.

The Council requires that organisations and clubs demonstrate, through the inclusion of an equity statement within their constitution and rules, a strong commitment to equal opportunities for all sectors of the community, ensuring that all participants, volunteers coaches or parents receive equal treatment regardless of age, gender, marital status, employment status, social class, colour, race, ethnic or national origin, religious belief or disability.

Sports Clubs Registered as Community Amateur Sports Clubs (CASCs)

Sports Clubs registered with Her Majesty's Revenue and Customs Service (HMRC) as CASCs are entitled to 80% mandatory rates relief. Clubs wishing to apply for this relief should provide the Council with a copy of their registration certificate. Providing that this confirms the registration commencement date, no further application is required. In the event that a club thinks it may be entitled to relief greater than 80% under the discretionary relief scheme, the appropriate discretionary application form should be completed.

Rural Rates Relief

Certain types of businesses located within a rural settlement with a population below 3,000, and in an area designated as rural by Scottish Ministers, may be eligible for mandatory relief of rates. The types of business that may qualify for this relief, together with the 1st April 2010 rateable value thresholds, are:

  • the only general store or post office with a rateable value of £8,500 or less;
  • a food shop with a rateable value of £8,500 or less;
  • the only public house/small hotel (with appropriate license), with a rateable value of £12,750 or less;
  • a petrol filling station with a rateable value of £12,750 or less.

These premises are entitled to mandatory 50% rate relief, with councils having discretionary powers to top up this relief to 100%. The Council's policy is to top-up the 50% mandatory relief with a further 25% discretionary relief, with the exception of petrol filling stations, which get an additional 50% discretionary relief.

Councils also have discretionary powers to grant up to 100% rate relief to properties within a rural settlement with a rateable value of £17,000 or less, used for purposes that are beneficial to the local community. This relief is currently applicable to rural schools only.

Download a rural relief application form and information sheet

De-Rating Allowance/Discretionary Rate Relief for Stud Farms

The rateable value of lands and heritages which comprise or include buildings used for the breeding and/or rearing of horses and occupied with agricultural land or agricultural buildings should be ascertained by making a deduction from what would otherwise be the rateable value. The deduction is made from the value of the whole property by the local assessor to reflect how much of the property is used as a stud farm. The maximum amount of the deduction the assessor can make is determined by the Scottish Ministers by order and currently stands at £3,500.

Additionally, stud farms with a rateable value of £7,000 or less, newly established on or after 1 April 2003, will be able to qualify for discretionary rate relief. The Council's policy is to award an additional 25% discretionary relief to complement the de-rating allowance.

Disabled Relief

To qualify for relief in terms of the Rating (Disabled Persons) Act 1978 the premises on which relief is claimed must be used wholly or mainly for one of the purposes specified below or for a purpose ancillary to the purposes specified:

  • The provision of residential accommodation for the care or after care of disabled persons or persons suffering from illness. (Note: that 'care' in this context does not include the provision of medical, surgical, or dental treatment i.e. hospitals and clinics are excluded);
  • The provision of facilities for training, or keeping suitably occupied, disabled persons or persons suffering from illness;
  • The provision of Welfare Services for disabled persons;
  • The provision for disabled persons of facilities for employment or work in terms of Section 15 of the Disabled Persons (Employment) Act 1944;
  • The provision of sheltered employment by a local authority in terms of Section 3 (1) of the Disabled Persons (Employment) Act 1958.

This relief is usually awarded to nursing homes, although other types of facilities associated with the welfare or training of disabled persons may also qualify.

Renewable Enery Generation Relief Scheme

The Non-Domestic Rates (Renewable Energy Generation Relief) (Scotland) Amendment Regulations 2016 detail a rates relief scheme from 1 April 2016 for renewable energy producers, replacing the scheme in place since 2010.

The new scheme offers relief to either: renewable energy generation developments with community involvement; or new build renewable generation property.

The Renewable Energy Generation Relief Scheme will provide non-domestic rates relief from 1 April 2016, to renewable energy producers who are solely concerned with the production of heat or power (or both) from the following sources: biomass; biofuels; fuel cells; photovoltaics; water (including waves and tides, but excluding production from the pumped storage of water); wind; solar power; geothermal.

The qualifying conditions for the purposes of the scheme is defined as a business owning, leasing or otherwise entitled to occupy one or more business properties in Scotland, solely concerned with the generation of heat or power (or both) from the sources noted above.

A renewable energy generation project is considered to have community involvement if there are arrangements in place which give to a community organisation (s), in return for investment in the project by that organisation (s), entitlement to a sum equivalent to:-

  1. At least 15% of the annual profit of the project; or
  2. So much of the annual profit of the project as is attributable to 1 megawatt of the total installed capacity of the project (or more).

The level of renewable energy generation rate relief available to community involvement schemes depends on the combined rateable value of your business's eligible property (or properties), and is set out in the table below:

Combined Rateable Value of all business properties in Scotland Percentage relief available
Up to £145k 100%
Up to £430k 50%
between £430k to £860k 25%
between £860k to £4m 10%
greater than £4m 2.5%

New property built between 1 April 2016 and 31 March 2017 used solely for the generation of renewable heat and/or power, and which is not part of a community renewables development, may receive 10% relief if RV is no more than £500,000 and 1.5% if above that figure.

Download a Renewable Energy Generation Rates Relief application form.
Further information can be obtained from the scheme guidance notes.

Enterprise Area Relief Scheme

The Enterprise Area Relief Scheme, as applicable to the Prestwick International Enterprise Area, may provide non-domestic rates relief from 1 April 2012 for businesses located within the Enterprise Area who are concerned with the manufacture of aircraft and spacecraft and related machinery and/or the repair and maintenance of aircraft and spacecraft. Only new build properties or properties which have been vacant for at least a three month period prior to occupation by a qualifying business, and are occupied for the sole or main purpose of the qualifying activity, are eligible for this relief.

Further information and maps relating to the Prestwick and other Enterprise Areas, can be obtained at the following website: http://www.scotland.gov.uk/Topics/Economy/EconomicStrategy/Enterprise-Areas. As this relief is available by application only, please download and complete an Enterprise Area Relief Application Form.

Non Domestic (Business) Rates Deferral Scheme 2012-13

The Scottish Government has introduced an opt-in non-domestic (business) rate deferral scheme for 2012-13. Under this scheme rate paying businesses in Scotland will be able to defer payment of part of the increase in their 2012-13 business rates bills as a result of the 5.6% increase in the poundage until 2013-14 and 2014-15. In practice this deferred amount is equal to 3.2% of the 2012-13 bill, which will be repaid half in 2013-14 and half in 2014-15.

Further information can be obtained from the Scot Govt Deferral Scheme Leaflet.

As this deferment is available by application only, please download and complete a Deferral Scheme application form.

Revaluation-Transitional Arrangements

Every five years all non-domestic (business) properties are assessed, and given new rateable values. The latest revaluation came into effect from 1 April 2010 and all business properties will have had their rateable values reassessed based on a valuation (tone) date of 1 April 2008.

Unlike previous revaluations, there is no transitional rates relief scheme, which means that businesses will pay their full rates liability from 1st April 2010, subject to entitlement to the various other relief schemes available.

Exemption from Rating

Churches, church halls, and other places of worship are entered in the Valuation Roll but are fully exempt from the payment of rates.

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