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Non-Domestic Rates and the Small Business Bonus Scheme

Letters from the Valuation Board have been distributed over the last few days. These relate to the 2023 Rates Revaluation.

You will have received notification of a change to your Valuation Roll entry, with advice that the law has changed in respect of the valuation for non-domestic rating of Self-Catering Holiday Accommodation.  For the purposes of the communication, the financial year is defined as 1 April 2022 to 31 March 2023.

Self-Catering: Definitions and Thresholds

  1. Self-Catering Accommodation is defined as:

“2. Any lands and heritages –
a) which are not the sole or main residence of any person; and b) which either –

  1. 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
  2. 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.

Self-Catering Holiday Accommodation Annual Declaration Form 2022/23

You will be sent a form to fill in for each self-catering unit on the rates roll. It will ask you to confirm that the following apply:

  • The property was not the sole or main residence of any person during the financial year 2022/23
  • The property was available to let as self-catering accommodation for at least 140 days during the financial year 2022/23
  • The lettings were on a commercial basis, for short periods, and derived a net profit

You will be asked to provide evidence of the following:

  • Where the property is marketed for let (website(s)/publications)
  • Copies of booking calendars showing the available days the property was marketed for let during the financial year 2022/23
  • Total gross income (ex VAT) achieved by the property during the financial year 2022/23
  • Evidence that a minimum of 70 days actual letting were achieved during the financial year 2022/23
  • Number of bed spaces

If you are a SuperControl client, it is easy to pull a report under Statistics / Property Performance.

If you fail to return the declaration within 28 days, or do not satisfy the requirements, the property will be deleted from the Valuation Roll and entered into the Council Tax Valuation List with effect from 1 April 2022.

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

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 your rates bill will be limited to £600 in 2023, £1,200 in 2024 and £1,800 in 2025. The other transitional relief limits are:

RV Range Max Cash Terms Increase
2023-24 2024-25 2025-26
£0-20,000 12.5% 25% 37.5%
£20,001-100,000 25% 50% 75%
£100,001 + 37.5% 75% 112.5%

Reliefs need to be applied for rather than provided automatically.

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