Chamber and committees

Covid 19 Appeal - Non Domestic Rates - 22 September 2021

Letter from Minister for Public Finance, Planning and Community Wealth to the Convener - 22 September 2021

Dear Convener,

I am writing to advise the Committee of a recent development in non-domestic rates which I believe will be of interest.

COVID-19 appeals

A number of appeals on non-domestic properties were lodged after the outbreak of the COVID-19 pandemic claiming that the pandemic, or its consequences, constituted a material change of circumstances (MCC) warranting a reduction in rateable value.

On 25 March 2021 the UK Government committed to ruling out COVID-19-related MCC appeals on non-domestic properties in England and the Welsh Government has also confirmed its intention to rule out such appeals in Wales. We agree with the UK Government that market-wide economic changes to rateable values, such as potentially from COVID-19, should be only considered at revaluation in order to ensure fairness to all ratepayers. We also agree with the UK Government that it is inappropriate to use the MCC provisions in the non-domestic rates legislation in relation to COVID-19, or COVID-19 restrictions. On 23 June 2021 the Scottish Government therefore confirmed its intention to also take measures to rule these appeals out in Scotland.

The draft Valuation and Rating (Coronavirus) (Scotland) Order 2021 is being laid in Parliament today. Subject to parliamentary approval, when it comes into force, this instrument will ensure that, when determining the rateable values of specified premises for the 2017 valuation roll, no account is to be taken of any matter arising on or after 1 April 2021 that is attributable to COVID-19, subject to an exception in relation to changes to the physical state of a property. In other words, a determination on a rateable value made after the order is in force will not be able to reflect any potential effect of COVID-19 on rental values after 1 April 2021 and up to the next revaluation.

Primary legislation is required to ensure that this rule applies to rateable values prior to 1 April 2021, and the Programme for Government published on 7 September announced plans to lay a Bill to this effect.

We will continue to ensure that the limited public resources available are efficiently targeted to support the most affected businesses and sectors in the recovery period.

The Policy Note of the draft order sets out further detail on the policy. I hope this will be of assistance to committee members.


Yours sincerely,

TOM ARTHUR