Firms call for more help for victims of business rates hikes

SNP ministers were last night urged to provide more help to firms hit by business rates rises – after Philip Hammond unveiled a £435million package for the rest of the UK.

The recent business rates revaluation has sparked an outcry from firms across Scotland which are facing eye-watering increases in their annual bills.

Although Fiance Secretary Derek Mackay announced £45million of extra measures to help firms last month, he is now facing calls to go further.

In yesterday’s Budget, Mr Hammond confirmed he would hand £300million directly to councils to help them offer relief to the worst-affected firms.

In Scotland, Mr Mackay has encouraged councils to help – but failed to give them any extra money.

Mark Addley, of accountancy firm PwC in Scotland, said: ‘With what has been announced regarding business rates in the Chancellor’s Budget in Westminster, some Scottish companies may look over the Border with envy.’

Responsibility for business rates is devolved to Scotland meaning that the Scottish Government is responsible for all key decisions.

In yesterday’s Budget, Mr Hammond announced that thousands of small firms facing huge hikes in business rates in other parts of the UK will have to pay no more than £50 extra each month from April. His £435million relief package will mean that 36,000 pubs will receive a £1,000 discount on their business rates. Councils will be given £300million to hand out to firms worst hit by the rate hikes.

Mr Hammond said the Government would also consult on revaluing business rates every three years instead of every five years, and would look at reforming the system so that online retailers like Amazon no longer receive favourable treatment. But he made it clear that scrapping the unpopular levy is out of the question.

Following an outcry from firms, Mr Mackay announced a package of emergency measures for Scots firms last month

The hospitality sector will pay £37.1million less in rates as a result of the changes, while the bill for the renewables sector will be £2.7million lower and offices in Aberdeen and Aberdeenshire – hit by the oil sector downturn – will pay £4.8million less.

But he confirmed that the cap of 12.5 per cent in business rates increases for these firms applies in only ‘the current financial year’ – meaning firms still face the threat of larger rises in future years.

He also told MSPs that the Government would take early action on the findings of a business rates review being led by former RBS chairman Ken Barclay.

David Lonsdale, director of the Scottish Retail Consortium, said: ‘What is needed is fundamental reform of rates so that it better reflects trading conditions and leads to a substantially lower tax burden.’