Tax is 'out of kilter with market'

Agencies unite to urge review of business rates

Sunil VaruLeading bodies in urban regeneration have called on the Scottish government to instigate a fundamental reform of business rates.

The Association of Town & City Management Scotland, the Scottish Retail Consortium and the Scottish Property Federation agree that the tax has become a significant drag on the Scottish economy.

The group say business rates, a tax levied on all non-domestic properties, are not linked to the economic performance of businesses.

This has united many organisations who claim that modernisation is now essential to support a balanced economic recovery and help high street businesses.

Sunil Varu (pictured), outgoing ATCM Scotland Chair and manager of Paisley Business Improvement District, said: “The rate relief given to small businesses by the government is really helpful, but is only a temporary fix. We need a permanent solution that brings rates in line with actual business performance if we are to revive town centres.”

David Martin, head of policy & external affairs for 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 taxes, it fails to flex with economic circumstances.  It is, uniquely, a tax that only ever rises.

 “Fundamental reform of the rates system is attracting growing support from a wide cross section of Scotland’s business and commercial life.  Rates reform 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.”

David Melhuish, Director of the Scottish Property Federation said: “Business rates are increasingly out of kilter with the property market they are based on leading to unfairness and significant burdens for many taxpayers.  Rates must become more responsive to changes in the economy and with the tax base updated regularly and fairly.”

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