In Scotland, business rates are called non-domestic rates, and the local council manages them. [1] The Small Business Bonus Scheme may reduce a bill where the combined rateable value of all business premises occupied is £35,000 or less, each property has a rateable value of £20,000 or less and the property is actively occupied, and a property that needs a short-term let licence must have a valid one. [2] Bill increases caused by the 2026 revaluation are limited by Revaluation Transitional Relief, which the council applies automatically.
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How business rates work in Scotland
In Scotland, business rates are called non-domestic rates, and the local council manages them. [1] Reliefs act as discounts on the bill, and whether a business is eligible depends on its business, property and circumstances. Whether a Scottish bill could be lower depends on the valuation and the reliefs that fit the premises, which is what a review of valuation, reliefs and billing looks at.
Rates reliefs only apply to the non-domestic rates bill and will not directly reduce rent, water charges or other bills. Rates reliefs are handled differently in England, Wales and Northern Ireland, so the reliefs described here are the Scottish ones.
How the 2026 revaluation affects Scottish business rates
Rateable values in Scotland were revalued on 1 April 2026, and Revaluation Transitional Relief limits increases in bills caused by the 2026 revaluation. A property is eligible if its rates increase would be above the cap without the relief, and the caps are a percentage of the amount payable on 31 March 2026. The local council applies this relief to the bill automatically. [2]
If a property is licensed self-catering holiday accommodation, it can also apply for a specific Revaluation Transitional Relief, which may give a larger discount on the rates bill.
Small Business Transitional Relief caps bill increases if on 1 April 2026 a property was no longer eligible for the Small Business Bonus Scheme or saw a reduction in eligibility, was no longer eligible for Rural Rate Relief, was getting Small Business Transitional Relief in the 2023 revaluation cycle (2023–24 to 2025–26), or was getting Hospitality Relief on 31 March 2026, although a property that needs a short-term let licence but does not have one is not eligible. It reduces the net bill increase in 2026–27 to 25% of what it otherwise would have been, and this cap applies after any other reliefs, including any Revaluation Transitional Relief.
England and Wales run a separate system, in which the Valuation Office updates rateable values every 3 years. [3] The guide to appealing a rateable value covers challenges there, and the guide to which properties are exempt in England covers exemptions.
Small business rates relief: the Small Business Bonus Scheme
Scotland's main relief for smaller firms is the Small Business Bonus Scheme. A business may get money off its non-domestic rates through the scheme if the combined rateable value of all the business premises it occupies is £35,000 or less, each property it occupies has a rateable value of £20,000 or less and the property is actively occupied, and a property that needs a short-term let licence must have a valid one.
Some property types cannot get Small Business Bonus Scheme relief, and the council's list is worth checking against the premises, while some shootings may be able to get rates relief on separate conditions.
A business must declare all its business properties in Scotland to the local council and complete an application form from the council. The non-domestic rates calculator on mygov.scot works out a bill based on the information given, including after Small Business Bonus Scheme relief. [4]
Small Business Bonus Scheme relief cannot be got for payday lending businesses or some types of shootings, and some shootings may be able to get rates relief on separate conditions.
Other non-domestic rates reliefs in Scotland
The reliefs local councils offer may vary, and some councils may offer additional local reliefs.
Where Business Growth Accelerator Relief applies to new buildings, no non-domestic rates are due until 12 months after completion and until the building is occupied, but relief while a building is empty is limited, so a new building empty for 5 years may get relief for 4 years while empty and no further relief for the new tenant. Under the same relief, where a business has to expand or make improvements to its property, the rates charged will not change for 12 months.
In a designated rural area with a population below 3,000, 100% relief is available for a small food shop, general store or post office with a rateable value below £8,500, or a small hotel, public house or petrol filling station with a rateable value of up to £12,750. In such an area, the same relief covers any other business providing a benefit to the community with a rateable value of up to £17,000.
For properties on the mainland that are not in one of the specific remote rural areas, a relief for retail, hospitality and leisure properties may be available from 2026–27 to 2028–29 where the rateable value is £100,000 or less, giving 15% relief, or 40% for licensed hospitality premises and music venues, with a maximum of £110,000 for each business year. Hospitality properties on islands and in specific remote rural areas may get 100% relief in the same years, also with a maximum of £110,000 for each business year. Empty Property Relief may be available for an unoccupied business property, depending on the local council.
Applying for relief through the local council
An application to the local council is needed for all reliefs except Revaluation Transitional Relief, which is given automatically. An application is always needed to get reliefs for a new business and when moving to a new property, and in some areas a business may also need to re-apply every year or if the council carries out a review.
It is free to apply for rates relief, and nobody needs to be paid to apply on a business's behalf. In some cases reliefs can be backdated, for example where a business forgot to apply in the relevant year.
The council should be told if circumstances change or the property changes hands, and it may fine a business that does not do this.
Sources
Rates, thresholds and dates in this guide come from these sources. Check the source for the current figure.