Buchanan Street Glasgow

Buchanan Street Glasgow.  Properties should be revalued after three years instead of the standard five, says the new review

Scottish business properties that are expanded or improved should be given a one-year grace period before paying higher business rates, according to a major review.

The Barclay Review of Non-Domestic Rates recommended a ‘Business Growth Accelerator’ to boost economic growth.

It also suggested properties should be revalued after three years instead of the standard five to minimise “shocks to the system”.

A ‘fresh start’ 50% rates discount in the first year of occupying a property would “incentivise occupation of empty shops and offices”, it said.

The independent review was commissioned by the Scottish government in March last year and led by former RBS chairman Kenneth Barclay.

Its remit was to examine the business rates system “to better support business growth or long term investment, while still retaining the same level of income”.

The Association of Convenience Stores and Scottish Grocers’ Federation have both welcomed the review and said it would make the system “fairer for retailers”.

“The Business Growth Accelerator is a welcome step toward incentivising businesses to invest in their properties and increase the range of services on offer to customers. The current system unfairly penalises those looking to make improvements in their business, leading to many retailers delaying investment plans in fear of the impact on their rates bills,” said ACS chief executive James Lowman.

“We also welcome the recommendation on more frequent revaluations in Scotland, which will reduce the shock of significant changes in valuations as seen from the seven-year gap between the 2017 and 2010 valuation periods.”

The government currently backs the Small Business Bonus Scheme, which exempts up to 100,000 properties with lower rental values.

But the review said the scheme, which has had more than £1.3bn worth of public funding committed in the past 10 years, should be evaluated as it questioned why some businesses paid nothing and also found “some misuse was apparent”.

SGF chief executive Pete Cheema said: “While we welcome the evaluation of the small business bonus scheme, we hope that it will be extended to take more convenience stores out of the rates system altogether, allowing them to concentrate on investment in jobs and services to our communities.”