The Courier & Advertiser (Fife Edition)
Proposed new rates spark business fears
CONSULTATION: Proposals contained within review paper
Scotland’s Finance Secretary Derek Mackay has published a consultation discussion paper introducing proposals following recommendations made in the Barclay Review of business rates.
One proposal is for an additional rates supplement for out-of-town and online firms, sending ripples of discontent through the business community.
Many retailers already pay, in addition to the standard rate, a business improvement district levy and large firms business supplement.
The new levy has been suggested as one of the possible remedies to the high cost of operating on the high streets
However opinion is split on whether it will have the desired effect.
The Scottish Government’s annual business statistics revealed the total tax burden faced by Scotland’s retail industry leapt by 27.9% to £579.3 million over the nine years to 2016.
This is evidence the burden to raise more taxes is being shouldered disproportionately by the business community.
The proposed levy will allow local councils to apply modest rates supplements on out-of-town businesses and mainly online ratepayers by 2020.
There would be a legislative cap on such supplements and parliamentary or ministerial approval would be required for each scheme.
Councils may have to consult before introducing a schemes.
The Federation of Small Businesses has welcomed the proposals, as the changes will hopefully encourage the growth of small, local businesses by raising money from this additional levy to help pay for reliefs elsewhere.
Indeed, if the scheme goes ahead, local businesses will be consulted on how best to spend the additional income.
However, not everyone is keen for the suggested levy as it will add to the already large list of expenditures faced by businesses in Scotland.
David Lonsdale, director of Scottish Retail Consortium, said: “The prospect of an additional business rates levy on firms located out of town and which operate online is alarming.
“Despite the Barclay reforms, the overall rates burden remains onerous.
“This new business rates surcharge is at odds with the Scottish Government’s ambition of delivering a competitive rates regime, and introduces a fresh element of unpredictability into the system.
“It will do little to aid town centres, since it is not an answer to the high cost of operating on our high streets, nor to the profound shift in consumers’ shopping habits.”
There will now be a consultation before legislation is introduced. It is suggested in the consultation discussion paper there would be a pilot scheme involving no more than three towns.
The implementation advisory group has agreed with the Barclay Review that this should be a pilot scheme, so it may be formally assessed before deciding on implementing it nationwide.