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| Why are business rates causing concern? | Why are business rates causing concern? |
| (35 minutes later) | |
| Some Scottish businesses have expressed concerns about proposed changes to the rates they have to pay. From April, some businesses could see a rise in the amount they pay, with the tourist and leisure industry, especially in the north east, expressing most concern. Why is this a problem now? | Some Scottish businesses have expressed concerns about proposed changes to the rates they have to pay. From April, some businesses could see a rise in the amount they pay, with the tourist and leisure industry, especially in the north east, expressing most concern. Why is this a problem now? |
| What are business rates? | What are business rates? |
| Unlike domestic homeowners, Scotland's businesses don't pay council tax. Instead, they pay business rates. | Unlike domestic homeowners, Scotland's businesses don't pay council tax. Instead, they pay business rates. |
| The amount shops, offices, pubs, hotels, warehouses and factories pay is based on a "rateable value". This valuation of a property is broadly based on an analysis of what annual rental values would be. | The amount shops, offices, pubs, hotels, warehouses and factories pay is based on a "rateable value". This valuation of a property is broadly based on an analysis of what annual rental values would be. |
| A combination of the rateable value and the poundage rate make up what businesses pay. | A combination of the rateable value and the poundage rate make up what businesses pay. |
| There are a range of rate "relief" schemes that can change the amount a business actually pays. | There are a range of rate "relief" schemes that can change the amount a business actually pays. |
| Why are businesses concerned now? | Why are businesses concerned now? |
| The Scottish Assessors' Association, which sets the rateable value, has been carrying out a revaluation of properties, the first since 2010. | The Scottish Assessors' Association, which sets the rateable value, has been carrying out a revaluation of properties, the first since 2010. |
| It is supposed to do this every five years but the 2015 revaluation was delayed by the Scottish government. | It is supposed to do this every five years but the 2015 revaluation was delayed by the Scottish government. |
| The newly-assessed rateable values will be introduced from 1 April and businesses are starting to work out what the new values will cost them. | The newly-assessed rateable values will be introduced from 1 April and businesses are starting to work out what the new values will cost them. |
| For some, the rateable value has actually reduced. But others are voicing concern that large rises could threaten the viability of their business. | For some, the rateable value has actually reduced. But others are voicing concern that large rises could threaten the viability of their business. |
| Hotelier in business rates boycott call | Hotelier in business rates boycott call |
| Business rates - what do they pay? | Business rates - what do they pay? |
| Why are some businesses having to pay more? | Why are some businesses having to pay more? |
| The valuations reflect the position at a moment in time and are frozen at that level until the next assessment. | The valuations reflect the position at a moment in time and are frozen at that level until the next assessment. |
| It is possible that some sectors such as hotels and pubs were experiencing strong conditions in April 2015 when the current value was established but are now struggling. | It is possible that some sectors such as hotels and pubs were experiencing strong conditions in April 2015 when the current value was established but are now struggling. |
| In the north east of Scotland, the hospitality industry has taken a hit over the past couple of years as the oil industry on which it relies has struggled with falling prices and output. | In the north east of Scotland, the hospitality industry has taken a hit over the past couple of years as the oil industry on which it relies has struggled with falling prices and output. |
| On the other side of the coin, sectors such as large retailers in out-of-town shopping centres once had very high values. Tougher competition in this sector and the move to bargain retailers such as Lidl and Aldi may have had the effect of reducing the rateable value of these properties. | On the other side of the coin, sectors such as large retailers in out-of-town shopping centres once had very high values. Tougher competition in this sector and the move to bargain retailers such as Lidl and Aldi may have had the effect of reducing the rateable value of these properties. |
| Why do some businesses think the rates are unfair? | Why do some businesses think the rates are unfair? |
| The rateable value of a business property reflects its general rental value, but not its profitability. | The rateable value of a business property reflects its general rental value, but not its profitability. |
| Two identical shops in the same street would probably pay the same rate even if one was extremely profitable and the other was having difficulty making ends meet. | Two identical shops in the same street would probably pay the same rate even if one was extremely profitable and the other was having difficulty making ends meet. |
| Some businesses are also complaining that the value was assessed in April 2015 and areas such as Aberdeen and the north east have seen a considerable slump since then. | |
| Are the Scottish government raising more money? | Are the Scottish government raising more money? |
| No. They are actually raising less because the threshold for paying the rates has been substantially raised, from £10,000 to £15,000. | No. They are actually raising less because the threshold for paying the rates has been substantially raised, from £10,000 to £15,000. |
| They also lowered the rate poundage by 3.7%, meaning businesses pay a lower percentage of their rateable value. The rate is now 46.6p but some larger businesses pay a supplement. | They also lowered the rate poundage by 3.7%, meaning businesses pay a lower percentage of their rateable value. The rate is now 46.6p but some larger businesses pay a supplement. |
| In 2016-17, the non-domestic rates raised £2.768bn and this year it is projected to bring in £2.605bn. | In 2016-17, the non-domestic rates raised £2.768bn and this year it is projected to bring in £2.605bn. |
| So, in effect, Scottish businesses are paying the same amount but the burden is falling in a different way. | So, in effect, Scottish businesses are paying the same amount but the burden is falling in a different way. |
| Are changes planned to the business rates system? | Are changes planned to the business rates system? |
| The Scottish government announced a review last year of the business rates, chaired by Ken Barclay, a former chairman of the Royal Bank of Scotland. | The Scottish government announced a review last year of the business rates, chaired by Ken Barclay, a former chairman of the Royal Bank of Scotland. |
| The review is expected to be completed by summer but would be too late to affect the latest revaluation. | The review is expected to be completed by summer but would be too late to affect the latest revaluation. |
| What are the Scottish government saying? | What are the Scottish government saying? |
| Finance Secretary Derek Mackay said the Scottish government had announced a package of action worth £155m to reduce business rates as part of the budget. | Finance Secretary Derek Mackay said the Scottish government had announced a package of action worth £155m to reduce business rates as part of the budget. |
| He said half of businesses would pay no rates, 70% will pay either no or less rates than they do currently, and the total package of reliefs will increase to more than £600m. | He said half of businesses would pay no rates, 70% will pay either no or less rates than they do currently, and the total package of reliefs will increase to more than £600m. |
| Mr Mackay said: "The revaluation is conducted independently and local authorities retain the revenue raised." | Mr Mackay said: "The revaluation is conducted independently and local authorities retain the revenue raised." |
| He said individual business rate payers could appeal against their valuation if they felt it was incorrect. | He said individual business rate payers could appeal against their valuation if they felt it was incorrect. |
| What are the other parties saying? | What are the other parties saying? |
| The Conservatives said they had been "inundated with letters from businesses across Scotland who are facing huge increases in their rates". | The Conservatives said they had been "inundated with letters from businesses across Scotland who are facing huge increases in their rates". |
| They claimed some faced having to pay four times more than they did previously. | They claimed some faced having to pay four times more than they did previously. |
| Ruth Davidson called on First Minister Nicola Sturgeon launch an urgent review into the rate increases. | Ruth Davidson called on First Minister Nicola Sturgeon launch an urgent review into the rate increases. |
| She said: "The amounts that are being asked for are clearly unsustainable and if immediate action is not taken then we risk seeing a huge amount of damage done to our economy." | She said: "The amounts that are being asked for are clearly unsustainable and if immediate action is not taken then we risk seeing a huge amount of damage done to our economy." |