December 2021 - Page 6 of 7

Budget Announcement: Impact on Non-Domestic Rates

Posted on December 12, 2021May 14, 2024 by Fiona Campbell

Following the publication of the Scottish Budget 2022-23 on 9 December 2021, the following non-domestic rates measures were announced:

There will be a below-inflation increase in the Basic Property Rate (the poundage) from 49p to 49.8p.
Properties in the retail, hospitality and leisure sectors will be eligible for 50% rates relief for the first three months of 2022-23, capped at £27,500 per ratepayer.
The Business Growth Accelerator relief will be expanded by making increases in rateable value due to the installation of solar panels a qualifying improvement eligible for relief.
Enterprise Areas relief will be extended by one year to 31 March 2023.

The Budget will continue to fund the following reliefs which are set annually:

Small Business Bonus Scheme relief, which has lifted over 111,000 properties out of rates altogether as at 1 June 2021.
Transitional Relief, which caps annual rates bill increases at 12.5% for Aberdeen City and Aberdeenshire offices and for all but the very largest hospitality properties across Scotland

Scottish Government Draft Budget

Posted on December 12, 2021 by Fiona Campbell

Policy Context

The Cabinet Secretary for Finance and Economy Kate Forbes set out the first Scottish Government Budget of the current parliamentary term, following on from the UK Government’s Budget back in October, and amidst challenging economic circumstances.[1][2]
This was Forbes’ third budget and she framed it as one of “choices”. However, while there are difficulties facing public services due to the pandemic, the Scottish Government does have more resources at its disposal through record block grant funding from HM Treasury. Indeed, to meet its policy plans, choices will have to be made due to hefty health and social care spending commitments, as well as the interventions necessary to make net zero targets a reality.
The first budget of the SNP-Scottish Green government, and there was a strong environmental thread running through it, with Forbes set out three main themes underpinning her spending plans: reducing inequalities, supporting economic recovery, and tackling climate change.
The Cabinet Secretary pointed to Brexit, the UK Government’s financial settlement, and lack of full economic powers as factors hindering her plans, noting that she would have liked to have gone further in certain areas. However, the Budget did contain a range of bold spending pledges.

Key Announcements

Some of the key announcements from the Budget are as follows:

Income Tax/Council Tax

The Starter and Basic Rate bands will increase by CPI, and the Higher and Top Rate thresholds will remain frozen in cash terms, raising an additional £106m in 2022-23.
The Council Tax freeze will end next year as local authorities will be granted flexibility over council tax rates, the first time this has happened since 2007.

Support for Business and the Economy

The Scottish Government will continue to offer lowest Non-Domestic Rates poundage in the UK, as well as ongoing rates relief for the retail, hospitality and leisure sectors, at 50% relief for the first three months of 2022-23, capped at £27,500 per ratepayer.
They will continue the Small Business Bonus Scheme, expand the Business Growth Accelerator relief, and extend Enterprise Areas Relief until March 2023.
Provide £205.9m towards capitalisation for the Scottish National Investment Bank – helping it deliver against its missions of supporting Scotland’s transition to Net Zero.

Housing

The Budget provides £831m for affordable housing, progressing the government’s commitment to deliver 110,000 affordable, energy efficient homes across the next decade.

Tourism

£370.5m to support enterprise agencies and £49.2 million for VisitScotland.
The Scottish Government will also resume work on the Visitor Levy proposal.

Self-Catering

The Budget notes the following: “recognising the impact of COVID-19, the Scottish Government chose last year to delay the implementation of the requirement that self-catering properties be let for 70 days in order to be classed as non-domestic. We will lay legislation for 2022-23 to deliver this anti-avoidance measure, which has been recommended by the independent Barclay Review of Non-Domestic Rates in order to tackle a known potential loophole for second homes.”

Opposition Response

The Shadow Cabinet Secretary for Finance and Economy Liz Smith led the response for the Scottish Conservatives and criticised Forbes for ignoring the level of grant funding from the UK Government. She added that the Scottish Government should have extended business rates relief and challenged them on the lack of commitment to structural reforms and investment in skills and digital infrastructure.
Prior to the Budget, Scottish Labour’s attack lines had accidentally made their way into the public domain. Nonetheless, Daniel Johnson soldiered on and argued that the Scottish Government’s plans did not go far enough in terms of child payments and pay for care workers, noting that block grant funding enabled them to go further.
Alex Cole-Hamilton of the Scottish Lib Dems criticised the Scottish Government’s pay policy for public sector workers such as teachers and social care workers, and also appealed for extra funding for long Covid care.

Next Steps

The Budget will now pass to committee level – where amendments and changes can be made – before going to a vote in plenary of all MSPs in February 2022.
However, unlike in the previous parliamentary session where the SNP Scottish Government was a minority administration and relied on deals with opposition parties, due to the Cooperation Agreement with the Scottish Greens, the final vote is a formality.

[1] The Budget in full can be accessed here: https://www.gov.scot/publications/scottish-budget-2022-23/documents/

[2] The statement from the Cabinet Secretary for Finance and Economy is available here: https://www.gov.scot/publications/budget-statement-2022-23/

ASSC Provide Evidence to the Local Government Committee on STL Licensing

Posted on December 7, 2021December 8, 2021 by Fiona Campbell

The ASSC today provided oral evidence to the Scottish Parliament’s Local Government, Housing and Planning Committee as part of their scrutiny of the Scottish Government’s proposed short-term let licensing scheme.

Our Chief Executive Fiona Campbell was joined by other industry stakeholders including David Weston from the Scottish B&B Association, Amanda Cupples from Airbnb, and Shomik Panda from the UK STAA.

During the hour and a half evidence session, we stressed the importance of our £867m sector to the Scottish economy, how it was imperative to back Scottish businesses to recover from the pandemic, as well as bringing some much needed clarity about existing regulations the government have at their disposal and what we should be looking to achieve in terms of the regulatory framework for short-term lets.

The ASSC also highlighted the uncertainties for future bookings arising from licensing, how the fees are completely disproportionate, and that local councils in charge of administering the scheme will also be negatively impacted. The panel as a whole emphasised the benefits that a mandatory registration system could bring to all affected stakeholders and best practice seen elsewhere.

The Committee was also joined by SNP MSP Fergus Ewing who called the evidence provided by the panellists against short-term let licensing as “comprehensive, persuasive and compelling.”

MSPs will now hear from another panel of witnesses next week, before taking evidence from the Cabinet Secretary Shona Robison and her officials.

Recorded video coverage of today’s Committee session can be accessed here. Unfortunately, the first ten minutes of the session were not recorded, but will be covered in the Committee report which will be published in due course.

Following today’s session, the ASSC released the following press comment.

Association of Scotland’s Self-Caterers Chief Executive, Fiona Campbell, said:

“These licensing regulations could not have come at a worse time for Scotland’s self-caterers, most of whom are still reeling from the devastating impact of the pandemic on our businesses and livelihoods.

“It remains astonishing that the Scottish Government seems intent on kicking self-caterers while we’re down by imposing these damaging and potentially ruinous regulations on a sector that contributes £867m to the Scottish economy each year, as well as supporting 24,000 FTE jobs.

“Instead of an onerous licensing scheme with crippling operator fees, the ASSC have put forward a workable and proportionate mandatory registration scheme which has cross-industry and cross-party support.

“The Scottish Government needs to change its course and show that it is on the side of thousands of small businesses across the country by giving them the room and flexibility they need to get back on their feet.”

The Official Report for the meeting of the LGHP Committee has now been published:

Url: https://www.parliament.scot/chamber-and-committees/official-report/what-was-said-in-parliament/LGHP-07-12-2021?meeting=13460&iob=122170

Pdf: https://www.parliament.scot/api/sitecore/CustomMedia/OfficialReport?meetingId=13460