Premises and business rates

If you need a place to work — a shop, unit, café or workshop — you will meet business rates. The good news: Scotland has a generous discount, and many small businesses end up paying nothing. This chapter explains it, and the traps to avoid before you sign a lease.

Business rates in Scotland

Non-domestic rates — usually just called “business rates” — are a tax on business premises. Scotland runs its own system, entirely separate from England’s.

• The rateable value of your property (a guess at its yearly rent) is set by the independent Scottish Assessors, not England’s VOA. You can look it up on the Scottish Assessors website.
• Your local council sends the bill and applies any discounts.
• mygov.scot has a rates calculator that estimates your bill after discounts and tells you which council is responsible.

The Small Business Bonus Scheme — the big one

This is the discount that matters most for small businesses.

Here is how it works:

• It depends on the rateable value of your property (and the total of all your Scottish properties added together). Broadly: full relief at the lowest values, on a sliding scale as the value rises.
• It is only for occupied properties, and you must declare all your Scottish business properties.
• You apply free, through your local council. You sign a short anti-fraud declaration; you do not have to give turnover or staff numbers.
• Some councils ask you to re-apply each year. Relief can sometimes be backdated.

Other discounts worth knowing

• Business Growth Accelerator Relief. If you take on a brand-new building, you pay no rates until 12 months after it is finished. If you improve or expand a property, your bill does not go up for 12 months. Handy if you are fitting out a place.
• Transitional relief. After a revaluation, this caps how fast your bill can rise — useful if you have just lost SBBS.
• Other reliefs exist for rural businesses, charities, day nurseries and “fresh start” empty premises. Councils may add their own local discounts too.

Scotland revalues all properties on a three-year cycle (2023, 2026, and so on). The 2026 revaluation is the current one.

Before you sign a lease

A commercial lease is a big commitment. Check these first.

1. Check the rateable value on the Scottish Assessors website — so you know the rates bill before you commit.
2. Apply for SBBS and any other relief with the council as soon as you move in. It is free.
3. Budget for water and sewerage. In Scotland these are billed separately, by licensed water providers, in a competitive market — you can shop around.
4. Check planning. Changing what a building is used for often needs planning permission. Scotland does not have England's automatic farm-conversion rights, so do not assume.
5. Remember Land and Buildings Transaction Tax. In Scotland, LBTT can apply to commercial leases, not just to buying property.

Working from home

Many businesses start at the kitchen table. That is fine, but check a few things:

• Permission. Your mortgage, tenancy or title deeds may restrict running a business from home. Check first.
• Planning. Usually not needed for a quiet, low-impact business — but it can be if you have lots of visitors, deliveries or signage.
• Rates. Most home businesses pay none, but if part of your home is used only for business, that part can sometimes attract business rates.
• Insurance. Tell your home insurer — normal policies often exclude business use.
• Safety and waste. Health and safety and trade waste rules still apply.