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Non-Domestic Rates and the Small Business Bonus Scheme

Self-Catering: Definitions and Thresholds

  • Self-Catering Accommodation is defined as:
  • Any lands and heritages –
    a) which are not the sole or main residence of any person; and b) which either –

    • i) are made available by a relevant person for letting, on a commercial basis and with a view to the realisation of profit, as self-catering accommodation for short periods amounting in the aggregate to 140 days or more in the financial year; or
    • ii) if they have not been made so available for letting in that year, are intended by a relevant person to be made so available for letting in that year and the interest of the relevant person in the lands and heritages is such as to enable him to let them for such periods.” (Scottish Assessors Association)

The Council Tax (Dwellings and Part Residential Subjects) (Scotland) Amendment Regulations 2021 (legislation.gov.uk)

These regulations relate to the requirement that, to be classed as self-catering holiday accommodation, premises must be let for a period of at least 70 days in the financial year (in addition to the existing requirement that the premises be available for letting for 140 days or more).

If your property is available for let for under 140 days, it means the property is in the Council Tax system; if it is available for let for over 140 days, it places the property in business rates. In order to be eligible for Small Business Bonus Scheme, you will now have to evidence the property being let for over 70 days per annum.

Transitional Relief

If you face significant liability increases, then you may be eligible for transitional relief. The level of relief depends on the Rv increase and whether you were in receipt of small business relief or not. If you were in receipt of 100% small business relief then you rates bill will be limited to £600 in 2023, £1,200 in 2024 and £1,800 in 2025. The other transitional relief limits are:

Reliefs need to be applied for rather than provided automatically.

Small Business Bonus Scheme

From 1st April 2023, you can get non-domestic rates relief through the Small Business Bonus Scheme if:

  • the combined rateable value of all your business premises is £35,000 or less.
  • and the rateable value of individual premises is £20,000 or less.

The benefits

Based on the total (cumulative) rateable value of all your non-domestic premises, the following relief is available:

  • total rateable value of any businesses in your name up to £12,000 – 100% relief (no rates payable) on each individual property
  • total rateable value of £12,001 to £35,000 – relief on each individual property with a rateable value of £20,000 or less. Relief is on a sliding scale from 100% at Rv £12,000, to 25% at RV £15,000, and the 0% at Rv £20,000 – see table attached. Calculating individual relief amounts is no longer simply, as the attached tables demonstrate.

Disclaimer – Guidance Sheets are written by experienced Members of the ASSC and other experts. The information in the ‘Guidance Sheet’ is provided by the ASSC for use by Members in support of their own independent business decisions. It does not constitute advice or instruction for which the ASSC can be held liable in any way whatsoever. All Members and other readers remain responsible for the consequences of any decisions taken whether in the light of information gained from this Guidance Sheet or not.

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