This item was published during the term of a previous administration that ended in April 2007
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Small business rate relief scheme
03/02/2003
The
small business rate relief scheme will commence from 1
April, it was confirmed today.
The introduction of the
small business rate relief scheme will provide rates
relief for some 70 per cent of non-domestic ratepayers in
Scotland. The aim of the new scheme is to spread the burden
of rates more fairly.
The information leaflet advises businesses whether they
are eligible to apply for the new rate relief which will be
available from 1 April 2003. Existing ratepayers will
automatically receive a copy of the information leaflet
from their local authority.
Minister for Finance and Public Services Andy Kerr
said:
"In December 2001 I announced that the Executive would
introduce a rate relief scheme for small businesses with
effect from 1 April 2003. In light of subsequent
discussions with business organisations and local authority
staff, a number of refinements have been made to that
scheme.
"The scheme provides practical help for all small
businesses which occupy premises with a rateable value of
£10,000 or less, thus maintaining the advantage small
businesses have had since we introduced the 2 pence
discount.
"Subjects occupying property with a rateable value of
£10,000 or more but less than or equal to £25,000 will pay
the standard poundage rate. In 2003-04 the additional cost
of the scheme will be paid for by businesses occupying
property with a rateable value of £25,000 paying a small
supplement of 0.6 pence on the rate poundage. This figure
is significantly less than the figure of 1.3 pence
mentioned in the consultation paper on rate relief for
small businesses.
"I believe we have devised a scheme which targets rate
relief at genuinely small businesses. This should create an
environment in which small business will be encouraged to
start up and existing small businesses will be able to
consolidate and grow."
From 1st April 2003 all non-domestic subjects in
Scotland with a rateable value of £10,000 or less are
eligible for a discount of between 5% and 50% on the rate
poundage. In 2003-04 the rate poundage will be 47.8
pence.
Rate relief for subjects with a rateable value of
£10,000 or less is set out below
TOTAL rateable value of all non-domestic subjects
occupied
Less than £3,000 - 50 per cent
£3,000 or above but under £4,000 - 40 per cent
£4,000 or above but under £5,000 - 30 per cent
£5,000 or above but under £6,000 - 20 per cent
£6,000 or above but under £7,000 - 10 per cent
£7,000 or above; or eligible for other
(non-discretionary) relief - 5 per cent
The exact level of relief therefore depends on:
(i) the total rateable value of all subjects occupied by
the rate-payer; and
(ii) whether or not the property is eligible for one of
the existing non-discretionary rate reliefs (Charitable
rate relief, disabled persons rate rebate, farm
diversification rate relief, rural rate relief, derating
allowance (stud farms) and relief by virtue of being
empty.)
If a subject is eligible for an existing
non-discretionary relief then it already qualifies for at
least a 50 per cent rate relief which is why the small
business rate relief is limited to 5% in these
circumstances.
Since 2001-02 all subjects with a rateable value of
£10,000 or less have received a 2 pence discount on the
rate poundage. Under this scheme, all such subjects will
receive at least a 5 per cent discount.