Businesses in Scotland are set to save thousands compared to their English counterparts this year due to receiving 100% non-domestic rates (NDR) relief. Independent research from the Scottish Parliament Information Centre (SPICe) has shown that businesses in Scotland saved £31,840 on average in financial year 2020/21 and are set for similar savings this year as the SNP Government has extended 100% rates relief for the entire year. Businesses in England are set to pay on average £7,075 as the UK Government has only extended 100% rates relief for 3 months, with businesses paying 34% of their rates for the remainder of the year. Rates relief for businesses is just one of the measures introduced by the SNP Government to support businesses, with £1.94 billion of grants paid direct to businesses since March 2020.
Kenneth Gibson MSP said: “The past 15 months have been incredibly tough for businesses across Scotland. However, the SNP Government has stepped up and supported businesses every step of the way. “Scottish Ministers recognise that even when we return to normality, businesses will continue to need support to get back on their feet and that is why the extension of non-domestic rates relief will be so crucial in Scotland’s recovery. “These measures, including billions of pounds of support in grants has allowed businesses to weather the storm as they have been forced to close down by law and put them in a position to reopen as restrictions allow. “As we begin to ease restrictions, the SNP will continue to support businesses and jobs.” Full research from SPICe is below: 1) On average, how much have businesses in Scotland saved since the introduction of 100% NDR relief in response to the COVID-19 pandemic? The 100% relief was made available to retail, hospitality and leisure (RHL) properties (as well as newspapers, specified airports and aviation-related subjects). According to official figures, at July 2020, 28,400 properties were benefitting from 100% relief, at a cost of £904.2 million. This is equivalent to an average of £31,840 per property benefiting from the RHL scheme.
2) By comparison, how much on average will businesses in England and Wales save in the 2021/22 financial year from the partial relief announced by the UK Government? (100% for 3 months and 66% thereafter) The Institute of Fiscal Studies (IFS) estimate that the 100% relief in 2020/21 for retail, hospitality and leisure properties will deliver an average saving of £28,300 per property in England The policy for England of a 100% discount for 3 months followed by a 66% discount results in an average discount of 75% across the full year. On the basis of the 2020/21 figures, this would imply a saving of around £21,225 per property in 2021/22 (given that the poundage rate has been frozen in England at 2020/21 levels). As with the Scottish figures, the averages for 2021/22 will also be affected by any decisions by larger retailers not to apply for the relief.
3) At the point where businesses in England and Wales start to pay partial NDR, how much will they need to pay on average? Based on the IFS figures for England for 2020/21, which suggested that the 100% discount represented an average saving of £28,300 per property in the retail, hospitality and leisure sector, then the amount that would need to be paid in a full year would be £7,075 with the reduced discount of 66% from July 2021.