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Sporting Rates Update

In our New Year News we noted that in December the Rural Affairs, Climate Change and Environment Committee published their Stage 1 report to the Scottish Government's land reform proposals. The Scottish Government has now published its response to the Rural Affairs Committee's report. The document can be read in full here with the section on sporting rates found in Part 6 beginning on page 47.

In response to the Committee's concerns regarding the Government's lack of any evidence to support its intentions, the Government cite that the public responses received illustrate general support for the principle of reintroducing Sporting Rates. They state that it is their belief that in the interests of fairness it is appropriate that shootings and deer forests bear a share of the burden of taxation and whilst other sectors such as agriculture, forestry and offshore oil and gas remain exempt, the Government is content that these are special cases which remain central to their policy priorities.

The Government acknowledges the points that have been made by the Committee and others that there should be more detailed impact assessment but highlights the limitations of what is achievable given that such a tax is only one factor to be taken into account in decision making that considers multiple influences. While they have not received any suggestions from stakeholders as to how to better approach this dilemma, they have given assurances that they will give further consideration to the matter and revert to the Committee in time for Stage 2.

In their response the Government has provided comment on the resources that would be required to affect the valuation process and provided assurance that they are in discussion with both the Assessor and COSLA on this matter but believes the cost implications will be incremental and sustainable.

Wild deer management is a significant issue and indeed forms part of the land reform proposals. The Government acknowledge that there are matters to be considered in giving the correct assessment to the treatment of deer culled in arriving at an appropriate valuation for rating purposes but believes that this is a matter to be left to the Assessor. The Government appear unconvinced that a blanket rates exemption is an appropriate tool to encourage effective deer management although they state that they remain open to consider detailed proposals in relation to new rates relief provisions in relation to deer.

In summary, the Government has stated that it will provide further material to support Parliament's consideration of this part of the Bill in time for stage 2 and will continue to listen and work collaboratively with stakeholders throughout Bill scrutiny and then on implementation of the 2017 revaluation to secure fair and workable rating arrangements. It does however appear that they are committed to the re-introduction of sporting rates

Assuming that matters progress as would appear likely, the Assessor will be required to undertake his valuation process in early course. The basis of any assessment is the hypothetical rental value i.e. the annual rent' which a sporting tenant would be willing to pay for stalking and shooting rights over a and holding on the basis that they are liable to meet the management costs (including rates). Accordingly, it will be important that landowners keep careful records of all factors which would be considered material in giving consideration to this exercise. 

The Government has provided the undernoted indicative delivery timeline:

Bill passesSpring 2016

Assessors' engagement with the sector; in-gathering and analysis of rental information; development of valuation methodology; production of practice note' for publication

Spring & Summer 2016
Assessors' production of draft valuationsfrom late 2016

Ministers set rates poundage for 2017-18 and consider relief schemes, having taken into account emerging valuations

late 2016 / early 2017

Assessors finalise valuations and deliver new valuation rolls to councils for 2017 revaluation

March 2017
Councils issue bills to rateable occupiersfrom March 2017
Applications for rates relief subject to eligibilityduring 2017-18

Assessors' deadline for valuation roll entries to take effect at start of 2017-18

31 March 2018

We will continue to keep you updated on further developments on these matters as they take place.