Barclay Review - a summary


For more information please contact:

Bruce Wilson
07802 910764

In 2016 Scottish Government asked Kenneth Barclay to undertake a wide ranging review of the current system of Non-Domestic (Business) Rates in Scotland; the “Barclay Review” has now published its findings and recommendation (attached) which will be presented to Scottish Government, the remit, focus and headline findings of the review are highlighted within the following illustration taken from the report:

In addition to these areas the report highlights a number of “other ideas” that they suggest should be considered to review the basis and operation of this tax.

A notable departure from the remit of a “revenue-neutral” is the case made for a move from rpi to cpi; this reflects the benefits the group and respondents highlighted in maintaining parity between the Scottish and English systems, ensuring no competitive disadvantage for Scottish ratepayers.

Scottish Government are yet to respond


Scottish Government requested a review of the current Business Rates system, on the presumption of “revenue-neutral” recommendations, they asked the review:

 “To make recommendations that seek to enhance and reform the non-domestic rates (also sometimes referred to as business rates) system in Scotland to better support business growth and long-term investment and reflecting changing marketplaces, whilst retaining the same level of income to deliver local services upon which businesses rely”

The review group was Chaired by Kenneth Barclay (ex-Chairman Royal Bank of Scotland) and in arriving at their recommendations they sought and received views from a range of parties including businesses, trade bodies, professionals, ratepayers, councils and members of the public which were then followed up by public and private discussions.

GL Hearn responded in written format and presented directly to the committee.

Kenneth Barclay has previously been quoted that his role was to identify ..”a simple case of implementing a rates system that will encourage economic growth, and be revenue neutral. That’s not to say radical ideas will not be examined, but a revolution or abolition is unlikely”


The report highlights 30 recommendations to reform the rates system in Scotland, in his introduction Kenneth Barclay identifies a number of specific areas that point to his underlying thoughts:

“… the creation of a delay of a year before rates liability is incurred when a property is improved, expanded or newly built, 3 yearly revaluations, reduction in the large business supplement and a new relief for nurseries. These measures will benefit the entire tax base – public and private sector and large and small business alike.”

“…By making a series of recommendations to reduce the administrative burden on businesses we can also support economic growth by freeing up time to allow them to do what they do best – growing the economy”

The recommendations fall into the following categories:

  1. Measure to support economic growth
  2. Measures to improve ratepayer experience and administration of the system
  3. Measures to increase fairness and a level playing field

In more detail, the 30 recommendations are:

Measures to support economic growth

  1. A Business Growth Accelerator – to boost business growth, a 12 month delay should be introduced before rates are increased when an existing property is expanded or improved and also before rates apply to a new build property
  2. There should be three yearly revaluations from 2022 with valuations based on market conditions on a date one year prior (the ‘Tone date’).
  3. The large business supplement should be reduced
  4. A new relief for day nurseries should be introduced
  5. Town Centres should be supported by expanding Fresh Start relief.
  6. There should be a separate review of Plant and Machinery valuations with particular focus on renewable energy sector valuations and statutory improvements to property including sprinkler systems.
  7. The effectiveness of the Small Business Bonus Scheme should be evaluated.

Measures to improve ratepayer experience and administration of the system

  1. The Scottish Government should provide a ‘road map’ to explain changes to the rating system and should consult whenever possible on those changes prior to implementation.
  2. There should be better information on rates made available to ratepayers – co-ordinated by Scottish Government.
  3. A full list of recipients of rates relief should be published to improve transparency.
  4. A “rateable value finder” product should be used – to identify properties that are not currently on the valuation roll, so as to share the burden of rates more fairly.
  5. Assessors should provide more transparency and consistency of approach. If this is not achieved voluntarily, a new Scotland wide Statutory Body should be created which would be accountable to Ministers.
  6. The current criminal penalty for non-provision of information to Assessors should become a civil penalty and Assessors should be able to collect information from a wider range of bodies.
  7. Standardised rates bills should be introduced across Scotland.
  8. Ratepayers should be incentivised to sign up for online billing where available except in exceptional circumstances.
  9. A new civil penalty for non-provision of information to councils by ratepayers should be created.
  10. Councils should refund overpayments to ratepayers more quickly.
  11. Councils should be able to initiate debt recovery at an earlier stage.
  12. Reform of the appeals system is needed to modernise the approach, reduce appeal volume and ensure greater transparency and fairness.

Measures to increase fairness and ensure a level playing field

  1. A General Anti-Avoidance Rule should be created to reduce avoidance and make it harder for loopholes to be exploited in future.
  2. To counter a known avoidance tactic, the current 42 days reset period for empty property should be increased to 6 months in any financial year.
  3. To counter a known avoidance tactic for second homes, owners or occupiers of self-catering properties must prove an intention let for 140 days in the year and evidence of actual letting for 70 days.
  4. The Scottish Government should be responsible for checking rates relief awarded, to ensure compliance with legislation.
  5. Charity relief should be reformed/restricted for a small number of recipients.
  6. To focus relief on economically active properties, only properties in active occupation should be entitled.
  7. To encourage bringing empty property back into economic use, relief should be reformed to restrict relief for listed buildings to a maximum of 2 years and the rates liability for property that has been empty for significant periods should be increased.
  8. Sports club relief should be reviewed to ensure it supports affordable community-based facilities, rather than members clubs with significant assets which do not require relief.
  9. All property should be entered on the valuation roll (except public infrastructure such as roads, bridges, sewers or domestic use) and current exemptions should be replaced by a 100% relief to improve transparency.
  10. Large scale commercial processing on agricultural land should pay the same level of rates as similar activity elsewhere so as to ensure fairness.
  11. Commercial activity on current exempt parks and Local Authority (council) land vested in recreation should pay the same level of rates as similar activity elsewhere so as to ensure fairness.

Other Ideas Considered

Outside the core remit and not put forward as specific recommendations the review does highlight a number of additional ideas that were presented to them, falling into three categories these are highlighted below:

  1. Changing the basis of tax
  2. The way in which the Revaluation works
  3. The operation of the non-domestic rates system

These are explored in more detail in the body of the report.

GL Hearn Comment

Bruce Wilson, GL Hearn National Head of Rating – “The Barclay Review was a wide ranging, well considered approach to understand and recommend ways in which the rates system could be more responsive and effective for ratepayers; it highlights a number of areas that have caused concern and has not shied away from more challenging recommendations, including:

  • A move to three-yearly Revaluations
  • A reduction in the large business supplement
  • The need for more transparency from Assessors, or the potential for a single Statutory body, responsible to Ministers.

I remain concerned that the review remit was “revenue-neutral” remit and, other than specific recommendations in respect of rpi-cpi, it did not address the fundamental issue that Business Rates are too high; I am equally concerned that the opportunity to recommend greater consistency between England and Scotland in respect of Material Change of Circumstances was not taken.

Overall I believe this is one of the more comprehensive reviews of recent times, with clear thought and recommendation and I hope that Scottish Government will take the opportunity to move on some of the areas highlighted whilst not losing sight of the need to fundamentally review opportunities to reform the current approach and cost of Business Rates to occupiers”

What Next

Although no clear timetable exists Scottish Government have committed to respond quickly to the review recommendations and we wait to hear that response; in the meantime should you have any questions in respect of this review or other Business Rates matters please make contact.

  • Share

For more information please contact:

Bruce Wilson
07802 910764