FARCE OF THE RATES TAX GRAB
As small firms, shops, pubs and nurseries trading in shadow of Amazon’s Scottish plant are hammered with massive business rates rises, the US giant has its bill CUT by £10,000
THE farce of Scotland’s business rates fiasco is exposed today – as internet giant Amazon is handed a tax cut while small businesses nearby face ruin because of soaring bills. New figures have revealed that the multinational online retailer, which made profits of £615million in the last three months of last year, will enjoy a £10,000 saving on one of its warehouses under the shake-up.
But businesses operating in the shadow of the company – including pubs, cafes, garden centres and guest houses – will all be subjected to a tax grab that could add thousands of pounds to their bills.
The revelation has added to the growing clamour to axe the business rate revamp, which has sparked fears of soaring prices, company closures and job losses. Yesterday’s developments came as it emerged:
An SNP-supporting businessman has condemned party leaders over the changes and for failing to deal with ‘here and now’ issues.
MPs at Westminster have called for an urgent review to ensure online retailers do not receive favourable rates treatment.
Finance Secretary Derek Mackay was accused of failing to listen to warnings of
the crippling impact a rates revaluation would have.
Businesses across Scotland face a rise of up to 620 per cent in business rates – with fears that jobs could be lost, prices will soar and some firms may be forced to close.
The changes follow a review by independent assessors.
But company owners, organisations and politicians have called on the Scottish Government to step in and freeze the current rate until a review on the rates system is finished later this year.
A Scottish Daily Mail investigation has now revealed the inconsistency in the revaluation system, with companies within the same business areas seeing dramatic differences.
The warehouse of online shopping firm Amazon in Gourock, Renfrewshire, is one of the large businesses in Scotland set to see a decrease in rates.
The firm’s current rate bill of £224,400 will drop to £214,020 when the changes are introduced in April.
But owners of nearby James Walker/Devol Engineering will see their business rates rise from £46,410 to £48,216.
The boss of Cloch Caravans Holiday Park, which is also close to the warehouse, will see rates soar by 6 per cent from £122,400 to £130,380.
Meanwhile, the NHS Greater Glasgow and Clyde Shore Street health centre in Gourock is set for a rise of 23 per cent – from £14,399 to £17,708.
The nearby Day Nursery is set to see business rates soar by 238 per cent from £6,534 to £22,135, while the Victoria Bar on Shore Street is set for a 26 per cent rise from £19,890 to £25,092.
Tony Dhesi, the owner of Cleats Bar, will see his business rates bill rise by more than £1,000.
Last night, he said: ‘The biggest company in the world nearly are getting a cut.
‘It is incredible really. They have got money to burn.’
Mr Dhesi, who has been running his business for 28 years, wants Nicola Sturgeon to listen to small business owners in Scotland.
He said: ‘She should listen to what we are saying. It is going to have a huge crippling effect.
‘I think you can expect at least a 25 per cent closure of shops on the high street.
‘When those business are closed, who is going to take them on?’
‘It will have a huge impact. It is high anyway. At the moment that is our main cost.
‘Fifteen years ago everything was included. Now we have to pay refuse collection separately.
‘It is totally crippling. People will struggle. You don’t want to run your business just to pay business rates.
‘You want to make a profit and then invest that back into your business – invest back into your employees, the tables and chairs that need to be replaced, I could go on and on.’
He added: ‘I would say they are hitting the wrong businesses and small businesses will just die.
‘Small business, being a huge employer, will have to pay off employees – as simple as that.’
Scottish Conservative chief whip John Lamont said: ‘This highlights the sheer chaos of the system. The SNP was well warned about this but failed to act.
‘Now, businesses right across Scotland are facing closure, with some having to pay double what they did before.
‘The SNP needs to sort this out as a matter of urgency.’
Other businesses in the area immediately surrounding the Amazon warehouse are also set to see business rates rises.
Yesterday, a spokesman for the online retailer declined to comment on the issue. However, senior MPs last night called for a review of business rates to ensure online retailers such as Amazon, Asos and Boohoo do not receive favourable treatment.
The three firms will all receive generous tax cuts.
Frank Field, the veteran Labour MP who heads the Work and Pensions Committee, and Iain Wright, chairman of the Business Energy and Industrial Strategy, said the current system penalises the high street and must be reviewed or ditched. Meanwhile, it has been revealed that top golf courses and even a haggis factory are being hit by soaring business rates.
The two sectors are vital for tourism and exports in Scotland and fears are continuing to grow over the impact business rate hikes could have on the country’s economy.
Royal Troon, which hosted the Open Championship last year, will see its rates rise from £89,540 to £93,200 in April. The business rates
of the Castle Stuart golf course near Inverness are set for a rise from £37,994 to £46,6000.
Last night, a spokesman for governing body Scottish Golf said it would be ‘a shame’ if rates were to be dramatically increased ‘at a time when clubs are challenged’.
The Macsween haggis factory in Edinburgh is also set for a rates increase of 24 per cent, from £32,282 to £40,122.
A Scottish Government spokesman said: ‘Rating valuation of business properties is undertaken by independent Scottish assessors, funded by local councils, not the Scottish Government. ‘Individual businesses can appeal their valuations via an independent process if they feel it is incorrect.’
Meanwhile, ministers in England and Wales faced a growing revolt over the business rates shake-up last night as leading industry groups claimed that it could be illegal.
A total of 13 major business groups south of the Border have put their names to a letter warning that small firms could be blocked from appealing against big rises in their bills.
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