Tax on out-of-town businesses attacked Consultation: Retail body presses government to scrap plans

A trade body has urged the Scottish Government to scrap plans that would allow councils to hit out-oftown and online businesses with higher rates bills.

The proposals, which could see up to three pilot schemes introduced after 2020, were branded “illconsidered and poorly timed,” by Scottish Retail Consortium (SRC) director David Lonsdale, who warned they would do nothing to achieve their intended aim of boosting struggling town centres.

He launched the attack ahead of tomorrow’s first anniversary of the publication of the findings of the Barclay Review of Business Rates by the Scottish Government.

As part of a consultation on implementing the review’s recommendations, the SRC wrote to Finance Secretary Derek Mackay praising the overall progress made, but voicing “profound concern” over the proposed business rates levy.

It said the new tax would add a “fresh element of imponderability and complexity into the rates system”, hitting retailers with extra costs when they need to invest to compete amid changing shopping habits.

The SRC wants clarification on how much the levy would cost firms.

It has also demanded safeguards if the tax is implemented, including a

“Adding an additional tax will do nothing to help struggling town centres”

statutory cap ensuring it is not punitive and a time limit for each local scheme, and details of on how any money raised would be spent.

Mr Lonsdale said elements of the Barclay proposals, and particularly a move to three-yearly revaluations, would help create a fairer, more flexible system.

But he added: “The illconsidered and poorly timed proposals for an out-of-town rates levy are an unnecessary distraction.

“We have long argued the rates system is already too complicated and too expensive. Adding an additional tax, on what at this stage appear arbitrary geographical considerations, will do nothing to help struggling town centres.”

A government spokesman said: “As part of the consultation, we are now seeking views on allowing up to three local councils to introduce pilot schemes in which businesses based predominantly online or out-of-town might be charged a modest business rates supplement.

“Proceeds would be used to support rates relief for businesses in town centres and we are consulting on a range of appropriate safeguards, such as the need for consultation with all rate-payers who might potentially be affected.

“We would encourage all those with concerns or comments about the current business rates system to take part.” The findings of the Barclay Review of Business Rates, led by Ken Barclay, former head of operations at Royal Bank of Scotland, were published by the Scottish Government a year ago.

Ministers plan to legislate for changes next year to implement the vast majority of the report’s 30 recommendations.

The proposals, some which have already been implemented and others rejected, cover three broad areas: Support for economic growth; improving the ratepayer experience and administration; and increasing fairness and

“Implement most of the report’s 30 findings”

ensuring field.

Economic growth measures include threeyearly revaluations, a 12-month delay on rate increases for expanded or improved properties, a reduction of the large business supplement and targeted support for nurseries and town centres.

Plans to improve the ratepayer experience and administration include better engagement between assessors and businesses and a more transparent, consistent and standardised approach across councils.

The review recommended a series of actions to tackle avoidance and ensure the integrity of the business rates regime to increase fairness and ensure a level playing field. a level playing

‘COMPLEXITY’: The Scottish Retail Consortium said plans to let councils tax out-of-town businesses would hinder, not help, town centres