We don’t want any out-of-town levy, retailers tell SNP
SCOTLAND’S supermarkets and retail stores say the SNP will be breaking a manifesto pledge if it introduces a tax on online and out-of-town firms.
The SNP Government wants to give councils the power to force firms like Amazon to pay a business rates supplement which would be used to help revive town centres.
But the Scottish Retail Consortium (SRC) has written to ministers to raise ‘profound concerns’ about the impact it could have on the economy. It cites a 2016 Holyrood election pledge to ensure Scotland has a ‘competitive rates regime’ compared with the rest of the UK.
But the Scottish Government last night defended pilot plans for a ‘modest business rates supplement’ for online and out-of-town firms in up to three council areas, saying it would fund rates relief for town centre firms.
In a formal submission to the Scottish Government’s consultation on rates reform, the SRC said: ‘From a retail perspective it completely misses the bigger picture about why some consumers take advantage of retail offerings based out-of-town or online, and it introduces an insidious “them and us” element into the rates system which is already designed to account for property differences through revaluations.
‘The levy proposal intro- duces a fresh element of unpredictability into the rates system, and is an admission that the local discretionary rates relief power introduced barely three years ago has thus far conspicuously underwhelmed.’
The SRC argues that the system is ‘already opaque without adding further complexity with this new levy’.
It adds: ‘Furthermore, a new Scotland-only rates levy on out-of-town or online businesses sits uncomfortably with the stated ambition of having a competitive rates regime compared to the rest of the UK.
‘A new levy would be counter-productive by making it more expensive for retailers to operate in Scotland, many of whom often compete internally with other parts of the UK or overseas for increasingly mobile investment capital.’
The SRC said it was ‘hugely concerned at how it could be fairly and effectively applied’. It added: ‘There is a danger that local authorities will see it as a quick way of increasing the already onerous business rates burden on a specific edge-of-town area’.
Earlier this month, the Scottish Daily Mail revealed that Fife Council has confirmed it wants to take part in a pilot scheme, which means Amazon’s biggest distribution centre in the UK, based in Dunfermline, could be affected.
Ministers have indicated that if a pilot in three council areas is successful it could be rolled out across Scotland.
The Mail also revealed that Amazon has launched a bid to slash its existing business rates bill in Scotland – and has previously persuaded assessors to reduce its rates charges by £200,000 a year.
The Scottish Government has published a consultation on its plans to allow an extra levy on ‘predominantly online’ businesses, as well as out-oftown operators.
It proposes that a new discretionary power is introduced to allow councils to apply ‘modest rates supplements from 2020 for out-oftown ratepayers or predominantly online ratepayers’.
It states: ‘The proceeds would be used to support ratepayers in town centres. This should be a pilot scheme, involving no more than three towns, and must be subject to a formal evaluation to determine whether those pilots were successful prior to any further rollout.’
The revamp of the system was first proposed by Ken Barclay, the former Royal Bank of Scotland chairman who headed a commission set up by the Scottish Government to consider business rates reform.
A Scottish Government spokesman said: ‘We are taking forward the recommendations of the Barclay Review aimed at supporting economic growth and increasing the fairness of the business rates system.
‘As part of the consultation we launched in June, we are now seeking views on allowing up to three local councils to introduce pilot schemes in which businesses based predominantly online or outof-town might be charged a modest business rates supplement.
‘The proceeds from this supplement would be used to support rates relief for businesses in town centres and we are consulting on a range of appropriate safeguards, such as the need for consultation with all rate-payers who might potentially be affected.’
‘Onerous burden’