Scottish Government plans to set rate relief threshold at £5 million

The British Hydropower Association (BHA) has welcomed an announcement by the Scottish Government that it plans to raise the upper limit for business rate relief for small-scale schemes.

The cabinet secretary for finance, Derek Mackay confirmed yesterday (5 October) in a written answer to MSP Kate Forbes that the Scottish Government plans to set the upper threshold for hydro schemes to qualify for 60 per cent business rates relief at £5 million and will “bring forward legislation in due course”.

The BHA has been campaigning for additional rate relief for hydro schemes in Scotland and in the past had warned some operators could struggle if business rate bills increased.

“The 60 per cent relief for hydro schemes is very welcome news, and now we know the upper limit will be a rateable value of up to £5 million, we are extremely pleased that the vast majority of hydro operators in Scotland will benefit from the BHA’s sustained lobbying of the Scottish Government on this matter over the past 12 months,” said BHA chair, Adrian Loening.

In August, an independent review into the business rates system in Scotland was published, which was headed up by the former chairman of RBS, Ken Barclay.

It made several key recommendations including a 12-month delay before business rates are increased when an existing property is expanded or improved, and also before rates apply to a new property.

It also called on the Scottish Government to introduce three-yearly revaluations from 2022 onwards and there should be a separate review of plant and machinery valuations, with a particular focus on the renewable energy sector.

“We will continue to press the government to ensure that the forthcoming fast-track review of the plant and machinery order is undertaken swiftly, efficiently and to the benefit of all hydro operators in Scotland,” added Loening.

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