Hotel group axes 50 after rates rocket
ONE of Scotland’s biggest hotel groups is to axe 50 staff after being hit by an ‘unsustainable’ business rates hike.
Macdonald Hotels announced the job losses after it had to absorb the ‘above inflation’ rates rise.
The firm told staff the increase was a factor in its operating costs becoming ‘unsustainably high’.
It came as it was disclosed that more than 22,000 businesses are having to pay more in rates than their English counterparts because of the SNP’s ‘supertax’.
Scottish Government figures show that businesses are being punished following Finance Secretary Derek Mackay’s refusal to overhaul the business rates system, which means larger companies pay double the rate than elsewhere in the UK.
Thousands of Scots firms appealed against their rate bills in 2017 after the first revalua- tion in nearly a decade saw some facing rises of up to 400 per cent. Despite initially refusing to step in, Mr Mackay was forced to place a cap on rates for certain sectors.
The SNP had been warned that business rates were crippling some firms, with thousands of jobs in hospitality at risk.
The Macdonald Holyrood Hotel, yards from the Scottish parliament, was revalued at £781,000 in April 2017 after previously being valued at £645,000. The new valuation is under appeal.
The company’s Rusacks Hotel beside the Old Course in St Andrews saw its valuation rise from £281,000 to £311,000.
In a letter to staff, Macdonald Hotels said it had been hit by rises in their ‘already significant’ business rates, along with an increase to the minimum wage and soaring energy and utility costs. It read: ‘In the majority of cases these increasing costs are outwith the company’s control.
‘For example, we have seen a range of additional, aboveinflation rises in our already significant business rates.
‘As a result of these various factors we have been left with no option but to consider implementing a number of redundancies.’
The announcement came as figures showed that 22,011 business properties in Scotland are paying £256million more for operating north of the Border.
In 2016 the Scottish Government doubled the Large Business Supplement to 2.6p in the pound. This is added to the rate for businesses where premises are valued at more than £51,000. Elsewhere in the UK, it is still 1.3p.
It comes less than a month after the Scottish Conservatives urged Nicola Sturgeon to rule out further business rate rises.
The party’s finance spokesman, Murdo Fraser, said: ‘Rather than trying to boost our sluggish economy, the SNP has chosen to widen the tax gap between Scotland and the rest of the UK.’
Scottish Retail Consortium director David Lonsdale said: ‘Restoring the level playing field with England on the rates levy must become a priority, as it only serves to make life tougher for retailers... to maintain a shop presence on our high streets.’
A Scottish Government spokesman said: ‘We have listened to businesses to deliver a belowinflation increase in the poundage. This ensures over 90 per cent of properties will pay a lower poundage than they would in other parts of the UK.’
‘SNP has chosen to widen the tax gap’