Non-Domestic Rates Transitional Arrangements: 2003-04
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Business Rates in Scotland: 2003-04
Transitional arrangements: 2003-04
This leaflet provides details of the transitional scheme for 2003-04 in Scotland. It supplements the information provided in the Scottish Executive's pamphlet "Non-Domestic Rates _ Revaluation 2000 Transitional Arrangements", which was enclosed with your 2000-01 rates bill. Both are available on the Scottish Executive's website on www.scotland.gov.uk under "Publications".
Transitional adjustments: 2000-01
In the year immediately following Revaluation, increases in rates bills were limited to 5% in real terms for small subjects (i.e. those with a rateable value of 10,000 or less) and 7.5% in real terms for all other subjects. Reductions in rates bills were limited to 5% in real terms. If you would otherwise have received an increase or decrease in your rates bill in excess of these limits you should have seen an adjustment in 2000-2001.
Transitional adjustments in 2001-02, 2002-03 and 2003-04: phasing out adjustments
In 2001-02 the adjustments began to be phased out with the aim that by 2004-05 all ratepayers will be paying their true rates bills. Ratepayers who had received an adjustment on their rates bill following Revaluation, saw the amount reduced for 2001-02 and 2002-03 to just over three quarters of the original adjustment and just over half of the original adjustment respectively. This year the amount will reduce again.
If you are currently in receipt of transitional relief, the amount of transitional relief you will receive in 2003-04 will be just over one-quarter (0.261) of the value you received in 2000-01 1. The same is true if you are currently contributing to the transitional relief scheme. Your contribution in 2003-04 will be 0.261 of the value you contributed in 2000-01.
In 2003-04 the Scottish Executive is introducing a small business rate relief scheme http://www.scotland.gov.uk/library5/finance/sbrs-00.asp .
The small business rate relief will apply to the rates bill after any adjustments for transitional relief in the same way as transitional relief interacts with other existing reliefs.
The cost of the scheme wll be paid for by a small supplement on the rate poundage for ratepayers who occupy a property with a rateable value in excess of 25,000. In 2003-04 the supplement is 0.6p. A note describing the calculation of the supplement can be found at http://www.scotland.gov.uk/consultations/enterprises/poundagesupp.pdf .
However, this will have no impact on the amount of transitional relief you receive from or contribute to the scheme, as the supplement will apply to the rates bill before any adjustments for transitional relief.
The examples below illustrate this:
Example 1: If you contributed 100 to the transitional relief scheme in 2000-01, you will contribute 26.10 (100 x 0.261) in 2003-04. This is before any small business rates relief has been applied. |
1. The factor for this year is 0.261, rather than 0.25, to allow for a real terms increase in poundage of 2.6 per cent in 2001-02 and a further 1.7 per cent in 2002-03. The poundage rate for 2003-04 has been frozen at the 2002-03 level so no real terms increase has been applied for 2003-04.
Example 2: If you received 500 in transitional relief in 2000-01, you will receive 130.50 (500 x 0.261) in 2003-04. This is before any small business rates relief has been applied. |
What will this mean for your bill in 2003-04?
In general terms, the amount you actually pay in rates in 2003-04 will depend on the rateable value of your property, and the amount you received from or contributed to the transitional relief scheme in 2000-01, the year immediately following revaluation.
Your bill in 2003-04 is calculated as:
- the amount which would be paid if there were no transitional relief. This is the rateable value multiplied by the poundage, which for 2003-04 is 47.8p
plus
- the amount received from or contributed to transitional relief in 2000-01 multiplied by 0.261. This figure will be negative, positive or zero depending on whether you, respectively, were in receipt of transitional relief, contributed to the transitional relief scheme or were neither receiving transitional relief nor contributing to the transitional relief scheme in 2000-01. The factor of 0.261 will be the same for both small and large businesses.
- If you are in receipt of any rate relief, including small business rate relief, your bill after taking account of any transitional relief/contribution, will be further adjusted to take account of the level of the rate relief you are receiving.
The examples below illustrate this:
Example 3: A subject has a rateable value of 20,000 and received 500 in transitional relief (TR) in 2000-01. |
Amount that would have been paid prior to TR (20,000 x 47.8p) = | 9,560 |
plus
Amount received (negative) from TR in 2000-01 times 0.261 (-500 x 0.261) = Bill to be paid in 2003-04 | - 130.50
9,429.50 |
Example 4: A subject has a rateable value of 30,000 and contributed 500 to the transitional relief scheme in 2000-01 |
Amount that would have been paid prior to TR (30,000 x 47.8p) + (30,000 x 0.6p 2) = | 14,520 |
plus
Amount contributed (positive) to TR in 2000-01 times 0.261 (+500 x 0.261) =Bill to be paid in 2003-04 |
130.50 14,650.50
|
2. In 2003-04 a subject which occupies a property with a rateable value of more than 25,000 is liable to pay a supplement of 0.6p on the poundage rate of 47.8p
Example 5: A subject has a rateable value of 5,000 and contributed 100 to the transitional relief scheme in 2000-01. |
Amount that would have been paid prior to TR (5,000 x 47.8p) = | 2,390.00 |
plus
Amount contributed (positive) to TR in 2000-01 times 0.261 (+100 x 0.261) = |
26.10 2,416.10
|
less small business rate relief 3 [2,416.10 x 20%] =Bill to be paid in 2003-04 | 483.22
1,932.88 |
Transitional adjustments and successful valuation appeals
If a property is the subject of a successful revaluation appeal, the rateable value will be amended on the valuation roll retrospectively to 1 April 2000. In these instances, rates bills will be recalculated, including any transitional adjustment, as if the new rateable value had applied immediately on revaluation.
In circumstances where the rateable value of a property has decreased as a result of a successful material change of circumstances appeal , the rates bill will also be recalculated back to the effective date. In this instance, the transitional adjustment will be amended to reflect the proportionate decrease in rateable value.
3. In 2003-04 a single owned subject with a rateable value of 5,000 is eligible for 20% small business rate relief
Specific queries about your individual bill should be addressed to your council.
If you have general enquiries about the new transitional arrangements you can contact the Scottish Executive's Business Rates Enquiries Section:
Address: Area 3-J
Victoria Quay
EDINBURGH
EH6 6QQ
Email:
Business.Rates.Enquiries@scotland.gsi.gov.uk
Telephone: 0131-244 7051
[general enquiries only]
You can also contact the Royal Institution of Chartered Surveyors Helpline number (020 7222 7000 and then ask for the Business Rates Helpline) for the name of the nearest professionally recognised rating surveying firm who will provide you with up to half an hour's free advice.