Government stalls on rates plan for private schools

Derek Mackay confirmed nurseries such as City Nursery in Greenbank will be exempt from business rates. Picture: Greg Macvean
Derek Mackay confirmed nurseries such as City Nursery in Greenbank will be exempt from business rates. Picture: Greg Macvean
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CONTROVERSIAL proposals to make private schools and council leisure trusts start paying business rates have been stalled by the Scottish Government.

Finance Secretary Derek Mackay told MSPs he wanted to consult further before deciding whether to accept the recommendation of the independent Barclay review to end the exemption currently enjoyed by independent schools and arms-length council companies like Edinburgh Leisure.

He will also consult further on the recommendation to make universities pay rates when they use venues commercially or let out student accommodation outside term time. But Mr Mackay announced he was extending the 12.5 per cent cap on rates bill rises for all but the largest restaurants, pubs and hotels – who faced some of the biggest increases from the latest revaluation – for another year.

And he said he was going further than the Barclay review, not only giving new businesses and those which improve their properties a one-year grace period before they have to pay rates, but also exempting new properties from business rates until they are occupied.

He confirmed nurseries would be exempt from business rates and said revaluations would now take place every three years, not five.

Conservative finance spokesman Murdo Fraser criticised the SNP for “keeping alive” the possibility of ending rates relief for leisure trusts, which he said undermined the Scottish Government’s policy of encouraging more active lifestyles. And he challenged Mr Mackay to rule out a “swim tax”.

Edinburgh Southern Labour MSP Daniel Johnson claimed the nursery exemption followed pressure from Labour.

But he called for more information to be provided to businesses so they could understand not just how much they had to pay, but how that figure was arrived at.

Andy Willox, policy convener for the Federation of Small Businesses in Scotland, hailed Mr Mackay’s package as “mostly sensible”. He said: “Growing firms should now be able to recoup some of their costs before being hit with a bigger rates bill.

“A three-year revaluation cycle should mean that businesses’ bills better reflect economic conditions.”

But he added: “The current business rates system is archaic. The Scottish Government must take responsibility for driving reforms and delivering a more modern, transparent system.”

Edinburgh Eastern SNP MSP Ash Denham said the measures announced by Mr Mackay were “extremely good news for businesses across Edinburgh”.

She said: “This is strong, decisive action from the SNP Scottish Government and we will continue to support Edinburgh’s local economy, particularly the key hospitality sector, and ensure that Scotland remains the best place in the UK to do business.”