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23 August 2017

Five takeaways from the Barclay review

Following the long-awaited publication of the Barclay review of business rates in Scotland, we look at what key proposals might mean for small businesses. 

1. Focus on short-to-medium term changes 

Anyone hoping for radical change to the existing, property-based tax system will be disappointed. The tight remit of the review group meant this was never likely to be on the cards, though we might have hoped for more consideration of long-term reform. 

Instead, many of the short-to-medium term changes that FSB argued could improve the current system, do feature in the report.

2. Creating an investment relief to smooth post-investment rates bills  

FSB’s detailed submission to the review group highlighted the need to introduce investment relief to allow businesses to see a return on investment made to their premises before hammering them with new valuations. This point has been accepted in the form of a proposed Business Growth Accelerator, which would delay any post-improvement valuation change for 12 months. 

builders carrying ladder

3. Move to more frequent revaluations 

The proposal to move from a five, to a three-year revaluation cycle is welcome. This should go some way to reducing the volatile changes in bills, and the mismatch between values and economic conditions, seen by some firms. 

4. Business should understand how they are taxed 

One of the persistent problems about the current rates system is just how irritatingly difficult it is for small business taxpayers. Both councils and the Scottish Government have been told to shape up, for example, in improving information for taxpayers and making online payment of bills easier. 

“I had to employ a chartered surveyor who explained to me how they (rates) were calculated due to the unhelpful assessor that I dealt with.” FSB member, Edinburgh

Similarly, whilst acknowledging their experience and expertise, the Assessors (the independent regional bodies responsible for actually coming up with rateable values) have been put on notice that changes to their behaviour and accountability are required. If improvements aren’t forthcoming, a new statutory body could be established to deliver the change required.  

5. Attention turns to the Scottish Government 

While there’s lots to welcome in the report, not least the attention focused on the need to improve the user-friendliness of the system, there are, of course, some risks for small firms. The report doesn’t take a view on the Small Business Bonus scheme but does recommend that the Scottish Government should review the scheme (though not until 2020). 

With the work of the independent review group complete, attention turns to the Scottish Government, which must now decide which of the report’s recommendations will be delivered. 


Susan Love is a Policy Manager for the FSB in Scotland 


See how FSB have campaigned on this issue