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Pressure mounts for reform

SRC boss Lonsdale: ‘Business rates system no longer fit for purpose’

David LonsdalePressure is building on the Scottish government to instigate a root and branch reform of business rates after a new report, backed by a number of business sectors, gave six reasons why the system is “no longer fit for purpose”.

The Scottish Retail Consortium is leading a campaign for change and has published Business Rates: Fundamental Reform calling for a new tax system that reduces the barriers to investment and is cheaper to administer.

The SRC says its plan would spread the tax burden more equitably and better support growth. A recent survey found that 69% of MSPs believe business rates are  in need of reform, with 58 per cent agreeing that a cut would stimulate business growth.

David Lonsdale, director of the Scottish Retail Consortium, said: “The SRC has long-argued that the current system of business rates is not fit for purpose and acts as a drag on Scottish economic growth.  It acts as a disincentive to invest and unlike any other national tax it fails to flex with economic circumstances.  It is, uniquely, a tax that only ever rises.

“Firms in Scotland are set to fork out £2.8 billion in business rates this year with well over a quarter of this coming from the retail sector.  However, as I visit retailers across Scotland one message is consistently to the fore – their confidence to invest going forward is being held back by the prospect of shelling out even more for business rates.”

The latest report comes just days after the Federation of Small Businesses criticised the government for not including business rates in the remit of the Commission for Local Tax Reform which held its first meeting on Monday. The commission is looking at replacements for the Council Tax, but non-domestic rates are not included in its discussions.

Mr Lonsdale said: “An overhaul of business rates would be a very effective and tangible step policy makers could take now to unleash business investment and growth that could bring with it many more Scottish jobs and a revival of our town centres.

“Fundamental reform of the rates system is attracting growing support from a wide cross section of Scotland’s business and commercial life, including publishers, manufacturers, the whisky industry and representatives of small firms.

“It is no longer an option to say that fundamental reform is too difficult or complicated – that particular ship has sailed. The challenge for politicians is to show us all how they are going to embrace the task of reform and deliver, with us, a system that is fit for the 21st century.”

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