PART 1 Introductory

Citation and commencement

1.  These Regulations may be cited as the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2025 and come into force on 1 April 2025.

Interpretation – general

2.  In these Regulations—

“ the 1962 Act” means the Local Government (Financial Provisions etc.) (Scotland) Act 1962( 3),

“ the 1966 Act” means the Local Government (Scotland) Act 1966( 4),

“ the 1975 Act” means the Local Government (Scotland) Act 1975( 5),

“ the 1997 Act” means the Local Government and Rating Act 1997( 6),

“ the 2022 Regulations” means the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2022( 7),

“ electronic communication” has the meaning given in section 15(1) of the Electronic Communications Act 2000( 8),

“ new entry”, in relation to a split, merged or reorganised entry, means an entry in the roll taking effect from the day on which the merged, split or reorganised entry takes effect,

“ New and Improved Property Relief Regulations” means the Non-Domestic Rates (Relief for New and Improved Properties) (Scotland) Regulations 2022( 9),

“ old entry”, in relation to a merged, split or reorganised entry, means an entry in the roll for the day immediately prior to the day from which the merged, split or reorganised entry takes effect,

“ part residential subjects” has the meaning given in section 99(1) of the Local Government Finance Act 1992( 10),

“ rateable value”, in relation to lands and heritages at a particular date, means—

“ rates” means non-domestic rates levied under section 7B of the 1975 Act( 11),

“ the relevant year” means the period of 12 months beginning with 1 April 2025,

“ revaluation” means the calculation of the rateable value of lands and heritages in connection with the making up of a valuation roll under section 1(1) of the 1975 Act,

“ the roll” means a valuation roll made up under section 1(1) of the 1975 Act.

Interpretation – mergers

3.  In these Regulations—

“ merged entry” means any entry in the roll taking effect on a day in the relevant year as a result of the lands and heritages shown in two or more old entries being shown in a single new entry where—

“ the relevant old entries”, in relation to a merged entry, means the old entries which showed the lands and heritages shown in the merged entry.

Interpretation – splits

4.  In these Regulations—

“ split entry” means any entry in the roll taking effect on a day in the relevant year as a result of lands and heritages shown in a single old entry being shown in two or more new entries, where—

“ the relevant old entry”, in relation to a split entry, means the old entry which showed the lands and heritages shown in the split entry.

Interpretation – reorganisations

5.  In these Regulations—

“ reorganised entry” means any entry in the roll taking effect on a day in the relevant year which is not a split or a merged entry and which shows lands and heritages—

“ the relevant old entries”, in relation to a reorganised entry, means the old entries affected by the reorganisation which gave rise to that entry,

“ reorganisation” means a situation where, with effect from a day in the relevant year, lands and heritages shown immediately before that day in two or more old entries are shown in two or more new entries, each of which is a reorganised entry.

PART 2 Transitional relief

Application of Parts 2 and 4

6.—(1) Subject to paragraphs (2) to (4), this Part and Part 4 apply to lands and heritages—

(a) which were shown in the roll on 1 April 2023, and

(b) for all or any part of which there was an entry, or were entries, in the roll on 31 March 2023.

(2) This Part does not apply to lands and heritages shown in an entry in the roll on 1 April 2023 if—

(a) that entry showed a nil rateable value, or

(b) the only lands and heritages shown in that entry which were to any extent shown in the roll on 31 March 2023 had a nil rateable value on 1 April 2023.

(3) This Part does not apply to any lands and heritages shown in an entry if the only lands and heritages that were to any extent shown in the roll on 31 March 2023 had a nil rateable value on 31 March 2023 but had a rateable value above zero on 1 April 2023.

(4) Where a merged, split or reorganised entry takes effect on a date after 1 April 2023, this Part and Part 4 cease to apply to the lands and heritages shown in that entry, as from the date on which the merged, split or reorganised entry takes effect.

Amount payable as rates

7.  Where the notional liability of any lands and heritages to which this Part applies, calculated in accordance with regulation 8, is more than the transitional limit for those lands and heritages, calculated in accordance with regulation 9, the amount payable as rates in respect of those lands and heritages is, subject to Part 3, that transitional limit.

Notional liability

8.  The notional liability of any lands and heritages to which this Part applies, on any day, is to be calculated in accordance with the formula—

Transitional limit

9.—(1) Subject to paragraph (3), the transitional limit of any lands and heritages to which this Part applies, on any day, is to be calculated as follows—

(a) where the rateable value for that day exceeds the rateable value on 1 April 2023, the transitional limit is calculated in accordance with the formula—

(b) in any other case the transitional limit is calculated in accordance with the formula—

(2) For the purposes of paragraph (1)—

BL is the base liability of the lands and heritages, calculated in accordance with regulation 10,

CRV is the rateable value of the lands and heritages on the day with reference to which the transitional limit is calculated,

RV is the rateable value of the lands and heritages entered in the roll at revaluation on 1 April 2023,

PF is the poundage figure of—

X is—

(3) Where relief is granted under regulation 10B( 12) (relief granted – financial year 2025-2026- lands and heritages in respect of which a relevant increase has been made within the previous 12 months) of the New and Improved Property Relief Regulations the transitional limit is calculated in accordance with paragraph (5) of that regulation.

Base liability

10.—(1) For the purposes of regulation 9, the base liability of any lands and heritages is—

(a) in the case of lands and heritages shown in a split or reorganised entry taking effect on 1 April 2023, to be calculated in accordance with the formula—

(2) In paragraph (1)(b), the deemed amount in respect of any lands and heritages is the amount which would have been payable as rates in respect of those lands and heritages for the financial year ending 31 March 2023, had that amount been calculated on the basis of the rateable value of the lands and heritages on 31 March 2023, including any additional amounts of rates payable in terms of regulation 4 (amount payable as rates – lands and heritages with rateable value exceeding £51,000, but not exceeding £95,000) or 5 (amount payable as rates – lands and heritages with rateable value exceeding £95,000) of the 2022 Regulations, but before applying any reliefs.

PART 3 Interaction with other reductions and reliefs

Charitable and other reductions

11.—(1) This regulation has effect for determining the amount payable as rates in respect of lands and heritages on a day in the relevant year where—

(a) that amount falls to be reduced by virtue of relief provided for in one or more enactments, other than Part 2 of these Regulations,

(b) regulation 7 has effect as regards those lands and heritages on that day, and

(c) regulation 12 does not have effect as regards those lands and heritages on that day.

(2) Where there is an entitlement to relief under both an enactment referred to in paragraph (1)(a) and regulation 7, relief under the enactment referred to in paragraph (1)(a) is to be applied to the amount of rates payable after regulation 7 is applied.

Partially unoccupied lands and heritages

12.—(1) This regulation has effect for determining the amount payable as rates in respect of lands and heritages on a day in the relevant year where—

(a) on that day those lands and heritages are subject to an apportionment under section 24A of the 1966 Act( 13), and

(b) regulation 7 has effect as regards those lands and heritages on that day.

(2) The amount payable is, subject to paragraph (3), to be calculated in accordance with the formula—

(3) Where—

(a) this regulation has effect as regards lands and heritages on a day, and

(b) the amount payable as rates in respect of those lands and heritages on that day falls to be reduced by virtue of relief described in regulation 11(1)(a),

the amount payable is to be determined in accordance with regulation 11(2) but as though for “regulation 7” there were substituted “regulation 12(2)”.

(4) This regulation ceases to apply where a merged entry takes effect on or after 1 April 2023, unless relief under regulation 11 was in place in respect of the lands and heritages in each of the entries which forms part of the merged entry, immediately before the merged entry took effect.

Exemptions and discretionary reductions and remissions

13.  Nothing in these Regulations—

(a) requires rates to be paid in respect of lands and heritages for a day where those lands and heritages are entirely exempt from rates for that day under any enactment, or

(b) prejudices the power of a rating authority to grant a reduction or remission of rates under section 3A or 4(5) of the 1962 Act( 14), section 25A of the 1966 Act( 15) or paragraph 4 of schedule 2 of the 1997 Act( 16).

PART 4 Cases involving small business bonus scheme relief or rural property relief as at 31 March 2023

Cap for properties with small business bonus scheme relief or rural property relief

14.—(1) This regulation applies in relation to lands and heritages where the amount of rates payable in respect of the lands and heritages was reduced by any of the following as at 31 March 2023—

(a) regulation 3 (amount payable as rates – lands and heritages with a rateable value of £18,000 or less) of the 2022 Regulations,

(b) paragraph 3 or 4( 17) of schedule 2 of the 1997 Act (relief from non-domestic rates for general stores etc. in rural settlements: Scotland), where entitlement to the reduction is lost on 1 April 2023 as a result of an increase in rateable value of the lands and heritages above the limit provided for in—

(i) article 3(1)(a) or, as the case may be, article 3(1)(b) of the 2005 Order, or

(ii) article 3(2) of the 2005 Order.

(2) Where the net notional liability of any lands and heritages to which this regulation applies, calculated in accordance with paragraph (3), is more than the transitional limit for those lands and heritages, calculated in accordance with paragraph (4), the amount payable as rates in respect of those lands and heritages is that transitional limit.

(3) The net notional liability of any lands and heritages to which this regulation applies on any day is equal to the notional liability calculated in accordance with regulation 8, after any reliefs have been applied, including under regulation 7.

(4) In respect of lands and heritages to which this regulation applies, the transitional limit, on any day, is to be calculated as follows:

(a) where the rateable value for that day exceeds the rateable value on 1 April 2023, the transitional limit is calculated in accordance with the formula—

(b) in any other case the transitional limit is calculated in accordance with the formula—

(5) For the purposes of this regulation the deemed amount in respect of any lands and heritages is the amount which would have been payable as rates in respect of those lands and heritages for the financial year ending 31 March 2023, had that amount been calculated on the basis of the rateable value of the lands and heritages on 31 March 2023, including any additional amounts of rates payable in terms of regulation 4 (amount payable as rates – lands and heritages with rateable value exceeding £51,000 but not exceeding £95,000) or 5 (lands and heritages with rateable value exceeding £95,000) of the 2022 Regulations, and after applying any reliefs.

(6) Where there is an entitlement to relief under both this regulation and regulation 7, relief under this regulation is to be applied to the amount of rates payable after regulation 7 is applied.

(7) Subject to paragraph (8), relief under this regulation may only be granted where an application is made in accordance with regulation 15.

(8) Where relief has been granted—

(a) under regulation 14 of the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2023( 18) in respect of the financial year 2023-2024, or

(b) under regulation 14 of Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2024( 19) in respect of the financial year 2024-2025,

no application need be made in respect of the relevant year.

(9) In this regulation “ the 2005 Order” means the Non-Domestic Rating (Rural Areas and Rateable Value Limits) (Scotland) Order 2005( 20).

PART 5 General

Applications for relief

15.—(1) An application for relief under regulation 14 must be signed by the ratepayer, or a person authorised to sign on behalf of the ratepayer.

(2) An application under paragraph (1) must be made to the local authority by—

(a) addressing it to the authority, and

(b) delivering or sending it to the authority’s office by post or electronic communication.

(3) For the purposes of this regulation—

(a) “ person authorised to sign on behalf of the ratepayer” means, where the ratepayer is—

(i) a partnership, a partner of that partnership or any other person authorised by it,

(ii) a trust, a trustee of that trust or any other person authorised by it,

(iii) a body corporate, a director of that body, and

(b) “sign” or “ signed” in relation to an application made by electronic communication means an electronic signature, as defined in section 7(2) of the Electronic Communications Act 2000( 21).

Amendment of the New and Improved Property Relief Regulations

16.—(1) The New and Improved Property Relief Regulations are amended in accordance with paragraphs (2) to (5).

(2) In regulation 9(1) (availability of relief – lands and heritages in respect of which a relevant increase has been made within the previous 12 months) for “Regulations 10” substitute “Regulations 10, 10A, 10B”.

(3) In regulation 10A(5) (relief granted – financial year 2024-2025- lands and heritages in respect of which a relevant increase has been made within the previous 12 months)( 22) for “calculated in accordance with regulation 9 of those Regulations” substitute “described in that regulation”.

(4) After regulation 10A( 23) insert—

“Relief granted – financial year 2025-2026 – lands and heritages in respect of which a relevant increase has been made within the previous 12 months

10B.— (1)  In relation to the financial year 2025-2026 the relief granted is that the amount of non-domestic rates payable is to be reduced as set out in paragraph (4) or, as the case may be, paragraph (5).

(2)  The amount of relief granted depends on—

(a) whether regulation 7 of the 2025 Regulations applies (transitional relief in the amount of rates payable),

(b) the total amount of any relevant increases made in respect of the lands and heritages taking effect on a day within the previous 12 months (“the reference amount”).

(3)  No relief is granted unless an application is made in accordance with regulation 12.

(4)  Where regulation 7 of the 2025 Regulations does not apply to the lands and heritages—

(a) the amount of non-domestic rates payable is to be calculated on the rateable value minus the reference amount, but

(b) if the rateable value minus the reference amount is a negative figure, then no relief is granted (and the amount of non-domestic rates payable is to be calculated on the rateable value).

(5)  Where regulation 7 of the 2025 Regulations applies, the amount of non-domestic rates payable is the transitional limit described in that regulation, and for these purposes the transitional limit is to be calculated—

(a) in respect of the lands and heritages for which the rateable value exceeds the sum of the rateable value on 1 April 2023 and the reference amount, in accordance with the formula—

(b) in any other case in accordance with the formula—

(6)  In this regulation, “ the 2025 Regulations ” means the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2025( 24) . ”.

(5) In regulation 11 (additional relief granted – lands and heritages in respect of which a relevant increase has been made within the previous 12 months)—

(a) in paragraph (1) after “regulation 10” insert “, 10A or 10B”,

(b) in paragraph (2)(b) after “regulation 10(2)(b)” insert “, 10A(2)(b) or 10B(2)(b)”,

(c) for paragraph (3) substitute—

“(3)  The provisions are—

(a) paragraph 3 of schedule 2 of the Local Government and Rating Act 1997 (rural rate relief)( 25) ,

(b) regulations 3 and 3B of the Non-Domestic Rates (Renewable Energy Generation Relief) (Scotland) Regulations 2010 (renewable energy generation relief)( 26) ,

(c) regulations 5, 5A and 5B of the Non-Domestic Rates (Enterprise Areas) (Scotland) Regulations 2016 (enterprise areas relief)( 27) ,

(d) regulation 4 of the Non-Domestic Rates (Hospitality Relief) (Scotland) Regulations 2025 (relief for lands and heritages used for hospitality purposes)( 28) ,

(e) regulation 3 and 4 of the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2024 (relief for lands and heritages with rateable values below a specified amount)( 29) , and

(f) regulation 3 and 4 of the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2025 (relief for lands and heritages with rateable values below a specified amount)( 30) . ”.

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 Scotland. They apply to the financial year 2025-2026. The Regulations do not apply where a non-domestic property is shown in a merged, split or reorganised entry in the valuation roll which takes effect during the financial year 2025-2026.

Part 1 makes provision as to citation, commencement and interpretation.

Part 2 deals with amounts payable in respect of lands and heritages which were shown in the valuation roll as at 31 March 2023 and 1 April 2023 (i.e. that were on the valuation roll at the end of the 2022-23 financial year and the beginning of the 2023-24 financial year). Regulation 7 provides that, for every day of the financial year 2025-26, the notional rates liability for a non-domestic property (that is, the gross amount ordinarily payable as rates before any reliefs are applied, calculated in accordance with regulation 8) must be compared against that property’s transitional limit, calculated in accordance with regulation 9. If the notional liability is more than the transitional limit, the amount payable will be capped at the transitional limit. The transitional limit is calculated by multiplying the base liability of the lands and heritages, calculated under regulation 10, by whichever is the appropriate factor as provided for by regulation 9.

Part 3 deals with the interaction between the transitional relief provided for in Part 2 with other reductions, remissions and exemptions. Regulation 11 provides that where any relief from liability to non-domestic rates applies (other than relief under Part 2), and provided regulation 12 does not apply, the amount payable is to be determined by first calculating the amount payable in accordance with regulation 7 and then applying the reduction specified in the enactment referred to in paragraph (1)(a) to that amount. In other words, where there is an entitlement to relief under both this regulation and regulation 7, relief under this regulation is to be applied to the amount of rates payable after regulation 7 is applied.

Regulation 12 provides for calculation of rates liability in respect of lands and heritages which are partially unoccupied, and to which regulation 7 applies, where there is an apportionment between the rateable value of the parts of the lands and heritages which are occupied, and those which are unoccupied. In determining liability, the rateable value is taken to be the figure attributed only to the part of the property which is occupied.

In terms of regulation 13, nothing in the Regulations requires the payment of rates on property on a day on which it is entirely exempt from rates under any other enactment, or prejudices the power of a rating authority to grant discretionary reductions or remissions.

Part 4 (regulation 14) provides for a cap on increases in rates liability on certain lands and heritages in respect of which there was entitlement either to relief under regulation 3 of the Non-Domestic Rates (Levying and Miscellaneous Amendment) (Scotland) Regulations 2022 (known as small business bonus scheme relief) or to relief under schedule 2 of the Local Government and Rating Act 1997 (rural property relief) as at 31 March 2023. In relation to rural property relief, the cap applies only where entitlement to the relief was lost on 1 April 2023 as a result of an increase in rateable value taking it above the applicable limits in article 3 of the Non-Domestic Rating (Rural Areas and Rateable Value Limits) (Scotland) Order 2005. The cap can be relied upon as an alternative to reliance on regulation 7. Alternatively, where it is in the ratepayer’s interests to rely on both regulations 7 and 14, regulation 14(6) provides that relief under regulation 14 is to be applied to the rates liability arrived at through applying regulation 7.

Part 5 deals with general matters. Regulation 15 provides the process for making an application for relief. An application is required for relief under regulation 14, unless relief under the equivalent provisions of the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2023 has been granted in respect of the financial year 2023-2024 or relief under the Non-Domestic Rates (Transitional Relief) (Scotland) Regulations 2024 in respect of the financial year 2024-2025. In that case no application for relief is required in respect of the financial year 2025-2026.

Regulation 16 makes amendments to the Non-Domestic Rates (Relief for New and Improved Properties) (Scotland) Regulations 2022 (“ the 2022 Regulations”), to reflect the interaction between transitional relief and new and improved property relief. Regulation 16(3) clarifies how the transitional limit is to be calculated, in relation to the financial year 2024-2025, where new and improved property relief is granted in relation to a property to which the transitional limit applies. Regulation 16(4) inserts a new regulation 10B into the 2022 Regulations. This makes provision as to how the transitional limit is to be calculated in relation to the financial year 2025-2026 where relief is granted to properties improved by refurbishment, expansion or construction. Regulations 16(2) and (5)(a) and (b) make consequential changes to regulations 9 and 11 of the 2022 Regulations, to reflect the insertion of regulation 10B and the earlier insertion of regulation 10A. Regulation 16(5)(c) updates the list of provisions in regulation 11(3), to be used to calculate entitlement to relief additional to that provided for by regulations 10, 10A and 10B.