Rishi piles pressure on SNP
Scots business chiefs praise Chancellor’s rates reforms and cuts for England and, naturally, are asking Kate Forbes: Will you do the same for us?
SCOTLAND’S businesses should be handed a tax cut similar to Rishi Sunak’s £7billion relief package, SNP ministers have been told.
Finance Secretary Kate Forbes was urged to follow the Chancellor, who unveiled a raft of business rates reforms and cuts for England in his Budget.
Mr Sunak said that the business rates ‘poundage’ level will be frozen south of the Border, saving firms £845million – or £4.6billion over the next five years compared with the 3.1 per cent increase which was planned.
At the same time retail, hospitality and leisure businesses will receive a one-year 50 per cent tax break from April 2022 ‘to support local high streets as they adapt and recover from the pandemic’.
The sectors, which have been battered by the impact of coronavirus restrictions since March 2020, have already benefited from 100 per cent rates relief in Scotland but this is due to expire at the end of next March and SNP ministers have not yet announced whether it will be extended.
UKHospitality Scotland’s executive director Leon Thompson said: ‘Today’s Budget statement from the Chancellor made clear the commitment to provide a 50 per cent discount rate to businesses in the coming
‘Same support as their counterparts in England’
financial year. Hospitality businesses have benefited from two years of 100 per cent relief on business rates from the Scottish Government, but face a cliff edge from April 1, 2022, if relief is not continued.
‘Today the Chancellor has declared his support for business, and the Scottish Government must at least match this if hospitality businesses across Scotland are not to face further financial difficulty and possible closure. Our businesses are at the heart of communities.
‘They remain in a fragile state and need a commitment from the Scottish Government that they can look forward to the same support as their counterparts in England.’
Marc Crothall, chief executive of the Scottish Tourism Alliance, said: ‘The move to implement a new one-year 50 per cent discount on business rates for the retail, hospitality and leisure sectors across England, Wales and Northern Ireland offers encouragement that the Scottish Government may follow suit by extending the current business rates discount for the sector and again go further than the UK Government.’
David Lonsdale, director of the Scottish Retail Consortium, urged Miss Forbes to be ‘more ambitious’ on business rates than Mr Sunak, who he said had ‘fumbled the chance to reduce the rates burden for all retailers in England’.
He said: ‘With retailers’ revenues continuing to fall short, a 100 per cent reinstatement of business rates would be unsustainable for struggling shops.’
Colin Wilkinson, the Scottish Licensed Trade Association’s (SLTA) managing director, said it ‘welcomes the recognition by the Chancellor in his Budget statement that the hospitality industry has been one of the sectors hardest hit by the pandemic with the announcement of a new 50 per cent business rates discount – up to £110,000 – for companies in the retail, hospitality and leisure sector in England lasting for one year’.
He added: ‘Rishi Sunak also announced the publication of a business rates review for England.
‘In Scotland, there is a very welcome rates freeze until March 2022. However, the SLTA now calls on the Scottish Government to at least match, if not improve on, the Chancellor’s ‘‘aid package’’ for our industry with the added proviso that this is directly focused on those most in need within the sector.’
The Treasury claimed an average corner shop will receive a £7,000 tax break, a typical pub will receive a £5,200 tax break, while a cinema could save £24,000 as a consequence of its announcements for England.
Overall the measure will cut businesses’ tax bill by £1.7billion next year, which officials said was ‘the biggest single-year cut to business rates in 30 years’. But businesses’ savings will be capped at £110,000 each, meaning it will only benefit small and medium-sized firms operating from no more than a handful of premises.
The Government completed a consultation with businesses into the rates system last autumn, but delayed an announcement over reform of the regime until now.
Mr Sunak said: ‘We are clear that reckless, unfunded promises to abolish a tax which raises £25billion every year are completely irresponsible. It would be wrong to find £25billion in extra borrowing, cuts to public services, or tax rises elsewhere, so we will retain business rates but with key reforms to ease the burden and create stronger high streets.’
The Government also delayed an announcement on a digital sales tax, seen as a way to level the playing field between the high street and online giants. It said that it will ‘continue to explore the arguments for and against a UK-wide Online Sales Tax, the revenue from which would be used to reduce business rates for retailers’.
Miss Forbes said: ‘We are already committed to three-yearly revaluations from 2023 and were the first administration in the UK to introduce a relief for property improvements in our more generous Business Growth Accelerator relief.
‘This year our retail, hospitality, leisure and aviation relief, at 100 per cent, is more generous than the UK Government’s.’
‘Create stronger high streets’