Retail, tourism, hospitality and aviation businesses will pay no rates during 2021-22 under proposals outlined today by the Scottish Government.
It is one of a series of measures proposed by Finance Secretary Kate Forbes following confirmation of a further £1.1bn of consequential funding arising from UK Government coronavirus spending.
The move builds on the three month rates relief extension announced in the Scottish Budget and will be taken forward provided the government receives the funding already assumed from the UK Budget on 3 March, and that requisite funds are available to maintain existing support into 2021-22.
Newspapers will also continue to benefit from 100% relief for a further 12 months, while charitable rates relief will not be removed from mainstream independent schools until 1 April 2022, due to the ongoing impact of the pandemic.
Other extra spending in 2021-22 arising from the latest consequentials includes:
- £120m for mental health.
- £120m for affordable housing.
- £100m to support people on low incomes.
- £60m for schools to help pupils catch-up on missed education.
- £60m for NHS recovery.
- £45m for heat decarbonisation, energy efficiency and fuel poverty.
- £21.5m for Scottish Enterprise.
Separately, local authorities will receive an extra £275m in the current financial year to address Covid-19 pressures, while a further £40m is being made available to support the safe reopening of schools.
Forbes said: “When I presented our budget last month I guaranteed to extend non-domestic rates relief further if I was given the necessary resources – I can now deliver on that promise, providing the UK Budget in March delivers the funding we require.
“This welcome additional consequential funding was confirmed to us yesterday and I wanted give early notice to parliament and provide clarity to businesses.
“We are still in the throes of a national emergency and it is important Parliament works together to respond,” she added. “I will continue to work with all parties to help deliver a budget for the nation fit for these times.”
Last month’s Scottish Budget estimated how much consequential funding would flow from the delayed UK Budget on 3 March, with £500m assumed to be provided.
David Lonsdale, director of the Scottish Retail Consortium, welcomed the news, calling it “a vital shot in the arm” for the retail sector, much of which remains closed and faces an uncertain future.
“The business rates waiver has been a lifeline for the retail industry, much of which has had to cease trading three times so far during the pandemic whilst at the same time investing significantly in Covid safety measures.
“Scrapping business rates for the coming year provides a much-needed cashflow and confidence boost for the industry – Scotland’s largest private sector employer – as it hopefully emerges from lockdown and seeks to recover.”
Meanwhile, CBI Scotland director Tracy Black said the rates relief will prove a major boost to under-pressure firms.
“Gradually reopening schools from Monday is also a welcome step forward on our journey to a new normal,” she stated.
“From discussions with firms across Scotland, we know reopening schools will provide working parents with much needed breathing space – every effort should now be made to help children catch up on their studies.”