Scots shops facing £12m business rate increase

● Scottish Retail Consortium fears the effect on struggling firms

Scotland’s retailers are bracing themselves for a £12 million rise in business rates that will batter already struggling firms, the Scottish Retail Consortium (SRC) has warned.

The SRC said “enormous pressure” was being put on businesses as a result of the controversial levy, which has proved particularly punitive in the north-east.

Across the region, the failure of the rates regime to take into account the oil and gas downturn has been blamed for firms going out of business.

April’s multi-million-pound increase was forecast by the SRC as it published its own report showing the number of north and north-east shops fell between 2011 and 2016 – the most up-to-date figures available.

SRC head of policy Ewan MacDonald-Russell said Scottish firms also had to deal with the large business supplement, which is costing retailers almost £14m per year.

Mr MacDonald-Russell called on ministers to bring the supplement into line with the rest of the UK.

“The expected £12 million increase in the retail business rates bill will further exacerbate the pressure, especially at a time where consumers are only spending on essentials,” he said.

The SRC said Scottish ministers had indicated next year’s business rates increase would go up in line with the Consumer Price Index (CPI) measure of inflation.

The Office for National Statistics recently said CPI in September stood at 1.7%, the figure to be used by the

UK Government to calculate business rates in the next financial year.

The Scottish Government has said increases in the poundage rate will be capped at CPI.

On that basis, the SRC calculated that a rise in line with inflation would amount to an extra £60m for all Scottish firms.

Retailers account for one fifth of Scottish business rates, giving them around an extra £12m on their bill.

The SRC report, Key Facts and Figures, found that since 2011 there had been a 3.1% decline in retail employment in Aberdeen, down to 12,700 in 2016.

Over the same period, Aberdeenshire had experienced a 3% fall to 10,400.

The number of shops fell across the north, north-east and Perthshire by 6.56% and retail turnover fell by 4%.

North East Tory MSP Alexander Burnett said the prospect of rising business rates was a “massive cause for concern”.

“The SNP’s brutal rates regime has had a ruinous effect on north-east business already,” Mr Burnett said.

A Scottish Government spokeswoman said 90% of Scottish properties paid lower rates poundage than elsewhere in the UK, adding that £750m worth of rates relief was made available in 2018-19.

“The SNP’s brutal rates regime has had a ruinous effect”

Photograph by Kath Flannery CONCERN: The Scottish Retail Consortium warned the rates rise comes at a testing time when consumers are only spending on essentials.