PART 1 Introductory

Citation and commencement

1.  These Regulations may be cited as the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2023 and come into force on 1 April 2023.

Interpretation – general

2.  In these Regulations—

“ the 1962 Act” means the Local Government (Financial Provisions etc.) (Scotland) Act 1962( 2),

“ the 1966 Act” means the Local Government (Scotland) Act 1966( 3),

“ the 1975 Act” means the Local Government (Scotland) Act 1975( 4),

“ the 1978 Act” means the Rating (Disabled Persons) Act 1978( 5),

“ the 1992 Act” means the Local Government Finance Act 1992( 6),

“ the 1997 Act” means the Local Government and Rating Act 1997( 7),

“ the 2022 Regulations” means the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2022( 8),

“ the 2023 Regulations” means the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2023( 9),

“ electronic communication” has the meaning given in section 15(1) of the Electronic Communications Act 2000( 10),

“ new entry”, in relation to a split, merged or reorganised entry, means an entry in the roll taking effect from the day on which the merged, split or reorganised entry takes effect,

“ new and improved property relief Regulations” means the Non-Domestic Rates (Relief for New and Improved Properties) (Scotland) Regulations 2022( 11),

“ old entry”, in relation to a merged, split or reorganised entry, means an entry in the roll for the day immediately prior to the day from which the merged, split or reorganised entry takes effect,

“ part residential subjects” has the meaning given in section 99(1) of the 1992 Act,

“ rateable value”, in relation to lands and heritages at a particular date, means—

“ rates” means non-domestic rates levied under section 7B of the 1975 Act( 12),

“ the relevant year” means the period of 12 months beginning with 1 April 2023,

“ the roll” means a valuation roll made up under section 1(1) of the 1975 Act, and

“ revaluation” means the calculation of the rateable value of lands and heritages in connection with the making up of a valuation roll under section 1(1) of the 1975 Act.

Interpretation – mergers

3.  In these Regulations—

“ merged entry” means any entry in the roll taking effect on a day in the relevant year as a result of the lands and heritages shown in two or more old entries being shown in a single new entry where—

“ the relevant old entries”, in relation to a merged entry, means the old entries which showed the lands and heritages shown in the merged entry.

Interpretation - splits

4.  In these Regulations—

“ split entry” means any entry in the roll taking effect on a day in the relevant year as a result of lands and heritages shown in a single old entry being shown in two or more new entries, where—

“ the relevant old entry”, in relation to a split entry, means the old entry which showed the lands and heritages shown in the split entry.

Interpretation – reorganisations

5.  In these Regulations—

“ reorganised entry” means any entry in the roll taking effect on a day in the relevant year which is not a split or a merged entry and which shows lands and heritages—

“ the relevant old entries”, in relation to a reorganised entry, means the old entries affected by the reorganisation which gave rise to that entry,

“ reorganisation” means a situation where, with effect from a day in the relevant year, lands and heritages shown immediately before that day in two or more old entries are shown in two or more new entries, each of which is a reorganised entry.

PART 2 Lands and heritages in the roll on 1 April 2023

Application of Parts 2 and 4

6.—(1) Subject to paragraphs (2) and (3), this Part and Part 4 apply to lands and heritages—

(a) which are shown in the roll on 1 April 2023, and

(b) in respect of all or any part of which there was an entry, or were entries, in the roll on 31 March 2023.

(2) This Part does not apply to lands and heritages shown in an entry in the roll on 1 April 2023 if—

(a) that entry shows a nil rateable value, or

(b) the only lands and heritages shown in that entry which were to any extent shown in the roll on 31 March 2023 have a nil rateable value on 1 April 2023.

(3) Where a merged, split or reorganised entry takes effect on a date subsequent to 1 April 2023, this Part and Part 4 cease to apply to the lands and heritages shown in that entry, as from the date on which the merged, split or reorganised entry takes effect.

Amount payable as rates

7.  Where the notional liability in respect of any lands and heritages to which this Part applies on any day in the relevant year is more than the transitional limit in respect of those lands and heritages on that day, the amount payable as rates in respect of those lands and heritages on that day is, subject to Part 3, that transitional limit, calculated in accordance with regulation 9.

Notional liability

8.  The notional liability of any lands and heritages to which this Part applies on any day is to be calculated in accordance with the formula—

Transitional limit

9.—(1) Subject to paragraph (3), in respect of lands and heritages to which this Part applies on any day—

(a) where the rateable value for that day exceeds the rateable value on 1 April 2023, the transitional limit is calculated in accordance with the formula—

(b) in any other case the transitional limit is calculated in accordance with the formula—

(2) For the purposes of paragraph (1)—

BL is the base liability of the lands and heritages, calculated in accordance with regulation 10,

CRV is the rateable value of the lands and heritages on the day with reference to which the transitional limit is calculated,

RV is the rateable value of the lands and heritages entered in the roll at revaluation on 1 April 2023,

PF is the poundage figure of—

X is—

(3) Where relief is granted under regulation 10 (relief granted – lands and heritages in respect of which a relevant increase has been made within the previous 12 months) of the new and improved property relief Regulations the transitional limit is calculated in accordance with paragraph (5) of that regulation.

Base liability

10.—(1) The base liability in respect of any lands and heritages is—

(a) in the case of lands and heritages shown in a split or reorganised entry taking effect on 1 April 2023, to be calculated in accordance with the formula—

(b) in any other case, the deemed amount (or, in the case of a merged entry taking effect on 1 April 2023, the total deemed amount) in respect of those lands and heritages calculated in accordance with paragraph (2).

(2) In paragraph (1)(b), the deemed amount in respect of any lands and heritages is the amount which would have been payable as rates in respect of those lands and heritages for the financial year ending 31 March 2023, had that amount been calculated on the basis of the rateable value of the lands and heritages on 31 March 2023, including any additional amounts of rates payable in terms of regulation 4 (amount payable as rates – lands and heritages with rateable value exceeding £51, 000 but not exceeding £95,000) or 5 (amount payable as rates – lands and heritages with rateable value exceeding £95, 000) of the 2022 Regulations, but before applying any reliefs.

PART 3 Reductions, remissions and exemptions

Charitable and other reductions

11.—(1) This regulation has effect for determining the amount payable as rates in respect of land and heritages on a day in the relevant year where—

(a) that amount falls to be reduced by virtue of one or more of the following enactments—

(i) section 4(2) of the 1962 Act( 13),

(ii) section 24(3) of the 1966 Act( 14),

(iii) section 4 or 5 of the 1978 Act( 15),

(iv) paragraph 3 of schedule 2 of the 1997 Act( 16),

(v) regulation 3 ( amount payable as rates – lands and heritages with rateable value of less than £20,000 (single entries)) of the 2023 Regulations( 17),

(vi) regulation 4(1) (relief granted - new building entered in the valuation roll under section 2(1)(b) of the 1975 Act), 6(1) (relief granted – new building resulting in an alteration to the valuation roll under section 2(1)(d) of the 1975 Act) or 11(1) ( additional relief granted - lands and heritages in respect of which a relevant increase has been made within the previous 12 months) of the new and improved property relief Regulations,

(b) regulation 7 has effect as regards those lands and heritages on that day, and

(c) regulation 12 does not have effect as regards those lands and heritages on that day.

(2) The amount payable is to be determined by applying the enactment referred to in paragraph (1)(a) by which the amount in question is reduced to the amount determined under regulation 7, in the same manner as that enactment would be applied to the full amount payable as rates in a case where the only relief applicable was the relief under that enactment.

Partially unoccupied lands and heritages

12.—(1) This regulation has effect for determining the amount payable as rates in respect of lands and heritages on a day in the relevant year where—

(a) on that day those lands and heritages are subject to an apportionment under section 24A of the 1966 Act( 18), and

(b) regulation 7 has effect as regards those lands and heritages on that day.

(2) The amount payable is, subject to paragraph (3), to be calculated in accordance with the formula—

(3) Where—

(a) this regulation has effect as regards lands and heritages on a day, and

(b) the amount payable as rates in respect of those lands and heritages on that day falls to be reduced by virtue of an enactment referred to in regulation 11 (1)(a)(i), (iii), (iv), (v) or (vi) ,

(c) the amount payable is to be determined in accordance with regulation 11(2) but as though for the words “regulation 7” there were substituted the words “regulation 12(2)”.

(4) This regulation ceases to apply where a merged entry takes effect on or after 1 April 2023, unless relief under regulation 11 was in place in respect of the lands and heritages in each of the entries which forms part of the merged entry, immediately before the merged entry took effect.

Exemptions and discretionary reductions and remissions

13.  Nothing in these Regulations—

(a) requires rates to be paid in respect of lands and heritages for a day where those lands and heritages are entirely exempt from rates for that day under any enactment, or

(b) prejudices the power of a rating authority to grant a reduction or remission of rates under section 3A or 4(5) of the 1962 Act( 19), section 25A of the 1966 Act( 20) or paragraph 4 of schedule 2 of the 1997 Act( 21).

PART 4 Cases involving small business bonus scheme relief or rural property relief as at 31 March 2023

Cap for properties with small business bonus scheme relief or rural property relief

14.—(1) This regulation applies in relation to lands and heritages where the amount of rates payable in respect of the lands and heritages is reduced by any of the following as at 31 March 2023—

(a) regulation 3 (amount payable as rates – lands and heritages with a rateable value of £18, 000 or less) of the 2022 Regulations,

(b) paragraph 3 or 4( 22) of schedule 2 of the 1997 Act (relief from non-domestic rates for general stores etc. in rural settlements: Scotland), where entitlement to the reduction is lost on 1 April 2023 as a result of an increase in rateable value of the lands and heritages above the limit provided for in—

(i) article 3(1)(a) or, as the case may be, article 3(1)(b) of the 2005 Order, or

(ii) article 3(2) of the 2005 Order.

(2) Subject to paragraph (3), where the net notional liability in respect of any lands and heritages to which this regulation applies on any day in the relevant year is more than the transitional limit in respect of those lands and heritages on that day, calculated in accordance with paragraph (4), the amount payable as rates in respect of those lands and heritages on that day is the limit calculated in accordance with paragraph (4).

(3) The net notional liability of any lands and heritages to which this regulation applies on any day is equal to the notional liability calculated in accordance with regulation 8, after any reliefs have been applied, including under regulation 7.

(4) In respect of lands and heritages to which this regulation applies on any day—

(a) where the rateable value for that day exceeds the rateable value on 1 April 2023, the transitional limit is calculated in accordance with the formula—

(b) in any other case the transitional limit is calculated in accordance with the formula—

(5) For the purposes of this regulation the deemed amount in respect of any lands and heritages is the amount which would have been payable as rates in respect of those lands and heritages for the financial year ending 31 March 2023, had that amount been calculated on the basis of the rateable value of the lands and heritages on 31 March 2023, including any additional amounts of rates payable in terms of regulation 4 (amount payable as rates – lands and heritages with rateable value exceeding £51,000 but not exceeding £95,000) or 5 (lands and heritages with rateable value exceeding £95,000) of the 2022 Regulations, and after applying any reliefs.

(6) Where there is an entitlement to relief under both this regulation and regulation 7, the relief to be granted is whichever is the higher level of relief.

(7) Relief under this regulation may only be granted where an application is made in accordance with regulation 16.

(8) In this regulation “ the 2005 Order” means the Non-Domestic Rating (Rural Areas and Rateable Value Limits)(Scotland) Order 2005( 23).

PART 5 Parks

Relief for parks or parts of parks previously exempt from rating and becoming rateable on 1 April 2023

15.—(1) This regulation grants relief in relation lands and heritages where the lands and heritages were entered in the roll on 1 April 2023, in terms of section 19(1ZA) of the Local Government (Financial Provisions) (Scotland) Act 1963( 24), together with section 19(1ZB) or, as the case may be, section 19(1ZC) of that Act.

(2) Subject to paragraphs (3) and (4), the relief granted is that the rates payable in respect of a day are reduced by 67% of the gross rates payable in respect of the lands and heritages at revaluation on 1 April 2023.

(3) Where the entry in a roll in relation to lands and heritages is split or reorganised on or after 1 April 2023, the gross rates liability of each part of the lands and heritages which is the subject of an entry is reduced by 67%.

(4) Relief may only be granted under this regulation where an application is made in accordance with regulation 16.

PART 6 General

Applications for relief

16.—(1) An application for relief under these Regulations must be signed by the ratepayer, or a person authorised to sign on behalf of the ratepayer, and—

(a) “ person authorised to sign on behalf of the ratepayer” means, where the ratepayer is—

(i) a partnership, a partner of that partnership or any other person authorised by it,

(ii) a trust, a trustee of that trust or any other person authorised by it,

(iii) a body corporate, a director of that body, and

(b) “sign” or “ signed” in relation to an application made by electronic communication means an electronic signature, as defined in section 7(2) of the Electronic Communications Act 2000( 25).

(2) An application under paragraph (1) must be made to the local authority by—

(a) addressing it to the authority, and

(b) delivering or sending it to the authority’s office by post or electronic communication.

Amendment of the new and improved property relief Regulations

17.—(1) Regulation 10 of the new and improved property relief Regulations is amended in accordance with paragraphs (2), (3) and (4).

(2) In paragraph (2), in sub-paragraph (a), for “2017” substitute “2023”,

(3) In paragraph (5)—

(a) for the words from “Where regulation 7” to “in that regulation” substitute “Where regulation 7 of the 2023 Regulations applies, the amount of non-domestic rates payable is the transitional limit calculated in accordance with regulation 9 of those Regulations”,

(b) in sub-paragraph (a)—

(i) for “1 April 2017” substitute “1 April 2023”,

(ii) in the formula—

(aa) for “2.247” substitute “X”, and

(bb) for “365” substitute “366”,

(iii) for the description of BL substitute—

“BL is the base liability of the lands and heritages calculated in accordance with regulation 10 of the of the 2023 Regulations, ”,

(iv) for the description of RV substitute—

“RV is the rateable value of the lands and heritages on 1 April 2023, ”,

(v) for the description of PF substitute—

“PF is the poundage figure of—

(vi) after the description of PF insert—

“X is—

(4) For paragraph (6) substitute—

“(6)  In this regulation, “ the 2023 Regulations ” means the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2023( 26) . ”.

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make provision as to the amount payable in certain circumstances as non-domestic rates in respect of non-domestic properties in Scotland. They apply to the financial year 2023-24. The Regulations cease to apply where a non-domestic property is shown in a merged, split or reorganised entry in the valuation roll which takes effect during the financial year 2023-24.

Part 1 makes provision as to citation, commencement and interpretation.

Part 2 deals with amounts payable in respect of lands and heritages which are shown in the valuation roll as at 31 March 2023 and 1 April 2023. For every day of the relevant year, the notional rates liability for a non-domestic property (that is, the gross amount ordinarily payable as rates before any reliefs are applied) must be compared against that property’s transitional limit. If the notional liability, calculated in accordance with regulation 9, is more than the transitional limit, the amount payable will be equal to the transitional limit. This is provided for by regulation 7. The transitional limit is calculated by multiplying the lands and heritages’ base liability, calculated under regulation 10, by whichever is the appropriate factor as provided for by regulation 9.

Part 3 deals with reductions, remissions and exemptions. Regulation 11 provides for reductions under other enactments to apply in cases where the amount of rates payable is determined under regulation 7 of these Regulations in the same way as they apply in cases where these Regulations do not have effect.

Regulation 12 provides for calculation of rates liability in respect of lands and heritages which are partially unoccupied, and to which regulation 7 applies, where there is an apportionment between the rateable value of the parts of the lands and heritages which are occupied, and those which are unoccupied. In determining liability, the rateable value is taken to be the figure attributed only to the part of the property which is occupied.

In terms of regulation 13, nothing in the Regulations requires the payment of rates on property on a day on which it is entirely exempt from rates under any other enactment, or prejudices the power of a rating authority to grant discretionary reductions or remissions.

Part 4 (regulation 14) provides for a cap on increase in rates liability on certain lands and heritages in respect of which there is entitlement to small business bonus scheme relief under regulation 3 of the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2022 or rural property relief under schedule 2 of the Local Government and Rating Act 1997, as at 31 March 2023. In relation to rural property relief, the cap applies only where entitlement to the relief is lost on 1 April 2023 as a result of an increase in rateable value taking it above whichever limit as set down by article 3(1) of the Non-Domestic Rating (Rural Areas and Rateable Value Limits) (Scotland) Order 2005 applies (in relation to mandatory relief) or article 3(2), in the case of discretionary relief. The cap can be relied upon as an alternative to reliance on regulation 7, where reliance on this Part provides a more favourable result in relation to entitlement to relief than application of the transitional limit calculated in accordance with regulation 9.

Part 5 (regulation 15) provides for relief for lands and heritages consisting of certain types of parks or parts of parks which become rateable on 1 April 2023 as a result of the taking effect of amendments to section 19 of the Local Government (Financial Provisions) (Scotland) Act 1963. The relief granted is 67% relief on the rateable value of the lands and heritages as it applied when the park was added to the valuation roll at revaluation on 1 April 2023. Where the entry in a valuation roll is split or reorganised on or after 1 April 2023, a 67% reduction is made on the gross rates liability on each part of the lands and heritages which is the subject of an entry in the valuation roll.

Part 6 deals with general matters. Regulation 16 provides the process for making an application for relief. An application is required for relief under regulations 14 and 15.

Regulation 17 makes amendments to regulation 10 of the Non-Domestic Rates (Relief for New and Improved Properties) (Scotland) Regulations 2022, to replace references to the Non-Domestic Rates (Transitional Relief)(Scotland) Regulations 2017 ( S.S.I. 2017/85) with references to these Regulations.