Rates Deferral Scheme for Scotland

7th April 2012

Scottish companies are being reminded that they can spread the cost of the inflationary increase in business rates through the Scottish Government's rate deferral scheme for 2012-13.

The scheme gives companies the flexibility to defer the uplift in their 2012-13 business rates bills over three years.

The deferred amount is equal to 3.2 per cent of the 2012-13 bill, which will be repaid half in 2013-14 and half in 2014-15.

Speaking to the Dundee and Angus Chamber of Commerce 'Place in the Modern World' conference today, Enterprise Minister Fergus Ewing said:

"This Government is committed to promoting prosperity in Scotland and much of this depends on the performance of our businesses - both large and small.

"We are investing in a supportive business environment to ensure that Scotland remains the most competitive place to do business in the UK.

"This year's Scottish budget maintains that commitment and thanks to our system of reliefs 57 per cent of Scottish business properties currently pay zero or reduced business rates bills.

"The normal annual inflationary changes in the pence in the pound tax rate or poundage, are a consequence of setting the same rate as that in England. I want businesses to have flexibility in the way that they address this and our scheme will allow them to do that.

"Every single business that pays rates in Scotland qualifies for this scheme and we would encourage businesses to access information on the scheme from their local authority."

Details Of the Rates Deferral Scheme

Scottish 2012-13 Business Rates Deferral Scheme

Information for businesses

Annual business rates bills are linked to inflation and from 1st April 2012 most nondomestic (business) rate bills in Scotland will increase by 5.6%. To allow businesses increased flexibility, the Scottish Government will implement an opt-in business rates deferral scheme for 2012-13 bills.

This scheme allows businesses to choose to spread repayment of part of the inflationary increase in their 2012-13 business rates over a 3 year period.

What is the deferral scheme?
You can choose to defer payment of 60% of the 5.6% increase in business rates bills
for 2012-13. In practice this equates to 3.2% of your 2012-13 bill.
You will repay the deferred amount split half into 2013-14 and half in 2014-15.
For example, if your rates bill is £25,000 in 2012-13, you can defer 3.2% - a total of
£800. This will be repaid by adding an additional £400 to each of your 2013-14 and
2014-15 bills. The remainder of your 2012-13 bill (£24,200) must be paid, as normal, in
2012-13.

Do I pay interest on the deferred amount?
No.

What is the catch?
There isn't one. The scheme is intended to provide flexibility for all rate paying businesses.
However, if you already receive 100% relief and have a bill of £0 (e.g. through the Small
Business Bonus Scheme) you won't have any amount to defer.

How does a business qualify/ apply?
Every single business that pays business rates in Scotland qualifies. But you must apply to your Council if you want to defer.

What if I pay no rates or get 100% relief under the Small Business Bonus Scheme (SBBS)?
If you are exempt from paying rates or already receive 100% relief your rates bill will be
zero so you have no amount to defer.

What do businesses need to do?
Deferral is available on request. If a business wises to defer 3.2% of its bill, it needs to
submit an application form to the non-domestic/ business rates team at the local Council.