Scotland to extend business rates relief to 2021-22   

The Scottish government has extended business rates relief for retail, hospitality, leisure and aviation businesses to 2021-22.

The announcement follows the confirmation of a further £1.1 billion of consequential funding arising from the UK government coronavirus spending.

Scottish Finance Secretary Kate Forbes has in the budget committed to extend 100% business rates relief for at least the first three months of the new financial year, adding that funding from the UK government would be needed to replicate the relief in full.

“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,” Forbes said.

“This welcome additional consequential funding was confirmed to us yesterday and I wanted give early notice to parliament and provide clarity to businesses.”

The measure will be taken forward provided the Scottish 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.

Trade bodies, who have been calling for an extension to the existing rates holiday, welcomed the decision.

“Extending rate relief for the next financial year will allow many more smaller firms to make it through to the end of this crisis and help them get back on their feet when the economy re-opens,” said Andrew McRae, the Federation of Small Businesses’ (FSB) Scotland policy chair.

“Should many bigger businesses choose not to take up this tax break, we’d like to see the money saved spent on measures to give local and independent businesses a shot-in-the-arm.”

The Scottish Licensed Trade Association (SLTA) said the announcement by the finance secretary was a “weight off our collective shoulders”.

“Extending 100% rates relief for the next financial year gives pubs, hospitality and tourism a fighting chance when we do re-emerge from lockdown,” SLTA spokeperson Paul Waterson said.

“However, what we need now is for UK Chancellor Rishi Sunak, in his Budget on March 3, to keep VAT at 5% and also extend current furlough arrangements. While rates are generally the biggest fixed rate costs for the hospitality industry, we look forward to further concessions that will help businesses.”

Meanwhile, First Minister Nicola Sturgeon said Scotland will start allowing children back to school from next week, even as the country’s general lockdown looks set to remain in place at least until March.

Sturgeon Tuesday told Scottish parliament that primary school pupils aged between four and seven in Scotland will start returning to the classroom from February 22.

“The evidence suggests that the key risk in reopening schools isn’t transmission of the virus within schools. Instead, the risk comes from the increased contact that the reopening sparks among the wider adult population,” she said.

Nearly 1.3 million people, or 28 percent of the adult population in Scotland, have received a first dose of a Covid-19 vaccine, Sturgeon said.

She said the Scottish rules would stay in place until at least the end of this month, but “a careful and gradual easing” may be possible “around the start of March”.