Rates and taxes ‘stifle growth’
Business chiefs urge ministers to overhaul system
RATES and taxation are a ‘major obstacle’ to success and growth and the system needs completely overhauled to make business more competitive, Scots companies claim.
Bosses believe they are being held back by the ‘burden’ of nondomestic rates and taxes, including National Insurance and VAT.
And retailers are now urging SNP ministers to revamp the business rates system to give firms a chance to expand.
The demands come after the Scottish Daily Mail revealed firms across the country are being denied savings of millions of pounds a year as councils fail to pass on vital rates relief – despite being given the powers to do so three years ago.
This week we launched our Save Our High Streets campaign in a bid to force ministers to step in and ease the pressures faced by businesses that are struggling with increasing rates and tax.
The Scottish Government has published the Small Business Survey, which shows 41 per cent of firms cite business rates, taxation, VAT, PAYE and National Insurance as ‘major obstacles’.
Ewan MacDonald-Russell, head of policy at the Scottish Retail Consortium, said the growing burden of rates and taxes on firms was having a ‘significant’ impact on business – and urged the Government to overhaul the business rates system.
He said: ‘Retailers have had to deal with ever increasing costs resulting from public policy in recent years. The cumulative burden of those increases, combined with the very significant burden of the current business rates system, makes it very difficult for businesses to make the necessary investment to succeed.
‘If the Government wants to offset the impact of those policies, making the rates system more competitive is the place to start.’
Finance Secretary Derek Mackay has pledged changes to the system following a review carried out by former RBS chief Ken Barclay – but has stopped short of revamping the way rates are calculated.
Thousands of firms in Scotland appealed against their rate bills last year following the first revaluation in nearly a decade, which saw some facing rises of up to 400 per cent.
Despite initially refusing to step in, Mr Mackay was forced to make a U-turn, placing a cap on rates for certain sectors.
Conservative MSP Rachael Hamilton said: ‘Businesses are right to point out the burden of rates and taxes on their ability to expand and thrive.
‘The balance is wrong, and it’s time the SNP Government sorted it out.
‘Ministers north of the Border should be supporting our high streets, not hampering them.
‘If small businesses are struggling, the whole economy suffers.’
The Small Business Survey also revealed that 47 per cent of small and medium-sized firms found red tape and regulations were a ‘major obstacle’, with 43 per cent citing competition in the market and 37 per cent saying staff and recruitment skills were an issue. A Scottish Government spokesman said: ‘Around half of all commercial properties in Scotland pay no rates at all.
‘We provide the most competitive rates relief in the UK, worth around £720million this year, including the Small Business Bonus Scheme, which alone lifts 100,000 properties out of rates altogether.’
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