CBI Scotland calls for urgent reform of business rates regime

CBI Scotland is calling for immediate reforms to the underfire business rates regime.

The group said companies faced being penalised unfairly in the short-term if changes are not made.

The group said the situation risked jeopardising investment and making Scotland less competitive than the rest of the UK.

It said research it had conducted suggested that if new investments in plant and machinery were exempted from business rates up to £2 billion of extra investment could be unlocked in the Scottish economy over the next five years.

It estimated the change would cost £500m over the period but said increased economic activity would more than offset the expense.

CBI Scotland director Hugh Aitken said many companies were struggling to cope with rising rates.

“For many businesses across Scotland increases in rates are simply unsustainable, which is why it is unfortunate that changes haven’t been implemented in tandem with Ken Barclay’s systemwide review this summer,” he said.

“As the CBI’s submission to the Barclay Review recommended, business rates would benefit from more regular revaluations, ensuring rates bills don’t see such dramatic jumps and remain responsive to local economic conditions.

“Moreover, the Scottish Government should consider removing productive investments in plants and machinery out of rates altogether, while also tackling the ongoing problem of Scottish businesses paying double through a large business supplement compared with those south of the border. If the tax system in Scotland is not competitive we risk undermining the very foundations for economic growth.”

Hugh Aitken of CBI Scotland.