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The revaluation that is scheduled for 2023 has a tone date of April this year. We have a one-year tone date, so the tone date for the revaluation for April 2026 will be April 2025.

The time between the 2023 revaluation being completed and the start of the 2026 revaluation is the period during which there will be further consideration of how more information can be provided and what information that will be. We will try to strike a balance to deliver as much information across as many property classes as possible, while recognising commercial sensitivity and, importantly, assessor workload, as I mentioned.

Following the 2023 revaluation, we will continue to engage with assessors and consult them on how we can expand the amount of information that is provided ahead of the 2026 revaluation.

Broadly speaking, the aim of the bill is to ensure that, with effect from 2 April 2020, no matter that is attributable to coronavirus can be taken into account in a non-domestic property’s net annual value or rateable value in the 2017 valuation roll.

Section 2 will amend section 2(1)(e) of the Local Government (Scotland) Act 1975, which places a legal duty on assessors to alter the valuation roll in certain circumstances while the roll is in force. The 2017 roll is in force until 31 March 2023. Section 2 will expand those circumstances by adding “the coming into force” of the bill.

As the committee will be aware, we have extended the disposal date for appeals until 31 December 2023 so that appellants can make an informed decision as to whether they wish to pursue an appeal once Parliament has finished considering the bill. Should any appeals continue to be pursued after the passage of the bill, it is possible that they might not be determined by 31 March 2023, given the time that it can take for complex appeals to be resolved.

Amendment 2 will remove section 2 and introduce an altogether new provision that creates a new duty requiring the assessor to apply the rule in section 1 to the current valuation roll and to make any resulting change to the net annual value or rateable value of any lands and heritages. The new provision also makes it clear that that obligation applies both while the current 2017 valuation roll is still in force and thereafter.

Our intention is to make it very clear that, should appeals continue to be pursued after the bill is passed, and should any values be reduced with effect from any period prior to 2 April 2020 as a result of a matter that is attributable to coronavirus, the assessor would be required to reverse that change with effect from 2 April 2020 in the 2017 valuation roll. As I have explained, there is no change to the policy intention. Instead, the amendments are intended to strengthen it, and we have discussed them with assessors to ensure that, from a technical perspective, they will do so. I hope that the committee agrees that the new wording makes that intention clearer, while also recognising that any Covid-19 appeals that appellants wish to pursue might not be resolved by 31 March 2023, particularly given the extended disposal deadline of 31 December 2023.

Amendment 3, which is consequential on amendment 2, will add to section 3 a definition of the term “assessor” for the purposes of the bill and ensure that references to that term in the bill are interpreted consistently and with reference to existing legislation. I hope that members will support both amendments.

I move amendment 2.

Amendment 2 agreed to.

Section 2, as amended, agreed to.

Section 3—Interpretation

Amendment 3 moved—[Tom Arthur]—and agreed to.

Section 3, as amended, agreed to.

Sections 4 to 6 agreed to.

Long title agreed to.

As you would expect, I will caveat my answer by recognising the independence of assessors. The question is apropos of the legislation that we were considering earlier. General economic and market conditions are best considered at revaluation. The reforms that we have implemented in which we have moved from a five-year revaluation cycle to a three-year cycle, and from a two-year tone date to a one-year date, mean that valuations will be more reflective of prevailing market conditions. However, in the legislative context in which we operate, it is of course for individual assessors to determine the RV for properties, and there is a well-established process for appeals to be raised by individual ratepayers who wish to do so.

Broadly speaking, the bill’s principal rule is that, in the calculation of the net annual value or rateable value in relation to any property in the 2017 valuation roll, no account can be taken of any matter occurring on or after 2 April 2020 that is directly or indirectly attributable to coronavirus. That date is consistent with non-domestic rates policy regarding the definition of “material change of circumstances”, and the circumstances in which general economic factors can be regarded as being relevant to a change in valuation.

Amendment 1 will add a new subsection to section 1 to make it clear, for the avoidance of doubt, that in the application of the bill’s principal rule, 2 April 2020 is the effective date from which a determination cannot reflect any matter that is attributable to coronavirus in rateable value or net annual value. It clarifies that, in the calculation of the net annual value or rateable value of any lands and heritages for the purposes of an entry in the valuation roll, should a matter that is attributable to coronavirus first occur before 2 April 2020 and continue to occur on or after that date, no account can be taken of that matter, with effect from 2 April 2020 onwards. Amendment 1 aims to strengthen the policy intention, and we have discussed it with assessors to ensure, from a technical perspective, that it will do so.

I hope that members will agree with the rationale that I have set out and will agree to amendment 1.

Amendment 1 moved—[Tom Arthur]—and agreed to.

Section 1, as amended, agreed to.

Section 2—Alteration of valuation roll

As I said in my opening remarks, we are committed to greater accountability and transparency in the non-domestic rates system. I recognise that that is of interest to ���˿��� and businesses across Scotland. Ahead of the 2026 revaluation, we will explore ways in which requirements can be expanded to allow for a larger share of properties to be on the valuation roll.

However, it was sensible in the first instance to focus on properties that are valued using the comparative method of valuation, because of the aforementioned commercial sensitivities that would come into play with the other methods of valuation.

Thank you, convener, and I thank the committee for the opportunity to give evidence on a second piece of NDR legislation today.

The Scottish Government is keen to ensure that non-domestic property valuations are better understood by ratepayers. The draft instrument that we are considering increases accountability in the non-domestic rates system ahead of the 2023 revaluation.

The Barclay review of non-domestic rates called for assessors to provide more information to property owners and occupiers when making rateable value calculations. The Barclay implementation appeals sub-group, which is an expert group that was set up to inform and advise Scottish ministers in respect of NDR reforms to the appeals system, specifically recommended that assessors should provide, alongside property valuations, the addresses of let properties, the rental evidence on which was used to inform the calculation of the basic rate to be applied to the property.

It proposed that four categories of property be covered in the first instance—standard shops, offices, warehouses and workshops—and that the list be expanded in the future.

We consulted on a draft instrument that sought to require that assessors provide that information in draft and final valuation notices in respect of revaluation. On one hand, some responses called for the proposed information-sharing requirements on the assessor to be expanded to more property types, or to more valuation methodologies. On the other hand, some raised a concern that, if the requirements were expanded, confidential and commercially sensitive information such as trading accounts or lease details could potentially be provided to third parties.

We considered that concern and, as a result, this draft instrument goes beyond the appeals sub-group’s recommendation. It requires that, for 32 categories of property that are valued using the comparative method and a basic valuation rate, the assessor must provide the addresses of comparable properties used to calculate that rate and state where that information can be accessed. Requiring that a list of addresses be produced only where two or more properties have been used for comparison for the valuation will avoid the risk that commercially sensitive information can be worked out indirectly.

I believe that our response to the consultation demonstrates our commitment to greater accountability in the rates system while ensuring that our reforms do not place an unrealistic burden on assessors. I hope that members will welcome that, given the points that the committee raised about assessor workload in its stage 1 report on the Non-Domestic Rates (Coronavirus) (Scotland) Bill.

We remain committed to greater accountability in the rates system and will explore how to expand on the information-sharing requirements in advance of the 2026 revaluation.

The draft instrument also contributes to modernising the NDR system by allowing for draft valuation notices to be sent electronically where that has been requested by the owner or occupier and has been agreed in writing between the assessor and owner or occupier.

I hope that members will support the draft instrument.

You flag up one of the challenges around how we can move from idea to implementation. At this stage, we want to see what is happening at a UK level. We need to have a sense of what the larger tax landscape will be like before we can proceed. If we do not, we could work up a proposal only to find it superseded by something that is implemented from Westminster, and I do not think that that would be a good use of resources.

If the UK Government decides not to legislate on or make progress in this area, we can decide how to take things forward. Consideration of an online sales tax is referenced in the framework; it is one of our manifesto commitments; it is a shared principle between the Scottish Government and the Scottish Green Party; and it is something that we want to be fully explored. However, as I said, we have to wait and see what the UK Government is going to do.

Absence of evidence is not evidence of absence. It goes back to the point about data: the challenge is having the data to evidence the impact. We know that there is support for the small business bonus scheme—for example, from the Federation of Small Businesses. Many of the small businesses that benefited from it value it. However, I take your point—

I take your point around the need for more robust data rather than what could be characterised as opinion or anecdotal evidence. That is why the report’s key recommendation around the need to enhance the amount of data that we have is an important one. It will allow us to be more effective in shaping policy, whether that is around specific reliefs or future consideration of more fundamental reforms. However, the key issue is data.

In my experience in engaging with businesses as a minister, and as a constituency representative for the past six years, the scheme is very much valued by those businesses. I apologise if I am misquoting, but I think that the FSB described it as a lifeline for many.

It is important that we consider carefully what the Fraser of Allander Institute has outlined in the report—that is why we are going to establish a short-life working group to consider it in more detail.

As I made reference to earlier, there is not necessarily a direct correlation between the rateable value of a business’s premises and its overall economic performance. That is a key point, and that is part of it.

However, I do not want to respond prematurely before having given this my full consideration. As I said at the outset, we are establishing a short-life working group and, as I said in response to a parliamentary question last week, I will of course be happy to update Parliament in due course, once we have had an opportunity to fully consider the report.

I will just reiterate what I have said previously: we very much value the report; it is an important contribution. I think that all the points that have been raised are pertinent.

Do you want to add anything, Alex?