Hike is 'troubling' says retail boss
Rates rise shock as Swinney’s Budget hits larger firms
Firms trading from larger commercial premises in Scotland are facing a rates timebomb as their rates bills rise in April by more than three times the current rate of inflation, according to new analysis.
The surge in costs is due to an increase the main poundage rate, announced by John Swinney in last week’s Budget, coupled with the doubling of the larger business supplement.
It means firms in commercial premises with a rateable value in excess of £35,000 will see their rates bill rise by 3.4% from April. RPI inflation is currently 1.1% while CPI inflation is even lower at 0.1%.
The doubling of the larger business supplement means that firms in Scotland will be paying more in business rates than firms in similar premises in England, says the Scottish Retail Consortium which produced the figures.
This is because the UK Government’s indicative figure for the large firms supplement in England for next year will remain the same as for the current year.
David Lonsdale (pictured), director of the Scottish Retail Consortium, said: “The inflation-busting hike in the supplementary charge on business rates is troubling, with firms operating from medium sized and larger premises in Scotland set to be paying more in business rates next year than firms operating in comparable premises in the rest of the UK.
“That will be a departure away from the previous pledge to keep rates here at the very least in line with the rest of the UK, and undermines claims to have the most competitive rates regime in the UK. It also opens the door to an even more decisive departure away from the uniform business rate if there is another shortfall in tax revenues from business rates by the time of the next Scottish Budget.
“Retailers and others are already having to grapple with the cumulative burden of the new apprenticeship levy, the new national living wage, higher employer pension contributions and a mooted new deposit return scheme for drinks and other containers which is estimated to cost retailers £86.4 million.”