The Non-Domestic Rates (Levying) (Scotland) Order 2005

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 subjects in Scotland. They apply only to the financial year 2005 06 (“the relevant year”).

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

Part II deals with amounts payable in respect of non domestic subjects which are shown in the valuation roll as at 1st April 2005 and 31st March 2005. The Part ceases to apply to a non domestic subject if and when it becomes the subject of a merged, split or reorganised entry in the valuation roll taking effect during the relevant year. For every day of the relevant year, the notional rates liability for a non domestic subject (that is, the full amount ordinarily payable as rates) must be compared against that subject’s upper and lower transitional limits. If the notional liability is more than the upper limit or less than the lower limit, the amount payable will be equal to the upper or lower limit, as the case may be (regulation 7). Upper and lower transitional limits are calculated by multiplying a non domestic subject’s notional rates liability for 2004/2005 (its “base liability”) by set figures (regulations 9 and 10). Regulation 11 makes provision for the calculation of base liability. Regulation 12 specifies how transitional limits are to be recalculated in cases where the rateable value of the non domestic subject changes during the relevant year.

Part III makes provision for the situation where a non domestic subject is shown in a merged, split or reorganised entry in the valuation roll which takes effect during the relevant year. If the amount of rates payable in respect of any component of the property shown in the new entry was being determined under Regulations immediately prior to that entry taking effect, then Part III applies to determine the amount payable in respect of that property for the rest of the year (regulation 13). That amount is calculated by apportioning or aggregating, as the case may be, the amount or amounts payable immediately prior to the effective date of the new entry in respect of the non domestic subject affected by the new entry (regulations 14 and 15). Regulation 16 provides for amounts payable to be recalculated if there is a change in the rateable value of property whilst Part III applies to it.

Part IV provides for a general reduction in rates for non domestic subjects with a rateable value of £11,500 or less. Regulation 17 provides for a reduction on a sliding scale of between 10 per cent and 50 per cent on the rates payable where the cumulative rateable value of the non domestic subject occupied by the ratepayer is less than £8,000. Where the amount of rates payable in respect of which the non domestic subject to which this part applies falls to be reduced by virtue of any of the enactments listed at regulation 17(3)(a), or is determined in accordance with regulation 17(3)(b) then the reduction in rates is limited to 5 per cent. Where the amounts of rates payable is reduced or remitted by virtue of the enactments listed at regulation 21(b) and regulation 17(3) does not apply then the percentage of rate relief given on the sliding scale shall be applied to the rates reduced or remitted. Where the cumulative value of the non domestic subjects occupied by the ratepayer is £8,000 or above, but includes subjects which are valued at £11,500 or under, the reduction on the rates payable on the said subjects is restricted to 5 per cent.

Part V provides for a general increase in rates for non domestic subjects with a rateable value of more than £29,000.

Part VI deals with reductions, remissions and exemptions. Regulations 19 and 20 provide for reductions under other enactments to apply in cases where the amount payable is determined under Part II, III, IV or V in the same way as they apply in cases where these Regulations do not have effect. Nothing in the Regulations requires the payment of rates on property which is entirely exempt from rates under any other enactment, or prejudices the power of a rating authority to grant discretionary reductions or remissions (regulation 21).

Part VII revokes the Non Domestic Rates (Levying) (Scotland) Regulations 2004.