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Charge 'will cost business £62m a year'

Business leaders call for rates levy to be reversed

Derek Mackay
Derek Mackay

Thirteen of Scotland’s business organisations have today called on Scottish Finance Secretary Derek Mackay to reverse the decision to double a supplementary business rates charge.

They say the increase in the Large Business Supplement from 1.3p to 2.6p will add £62 million to the annual costs of running businesses in Scotland.

In a joint letter, the organisations, including the Chambers of Commerce, IoD and CBI, say the Finance Secretary needs to cut the rates bill in line with the level in England.

They say that the supplement affects one in eight commercial premises in Scotland.

“Reducing the surcharge to the level which applies in England would not only be fair and make Scotland’s Business Rates more competitive, but would also help to reduce the cost base of many hard pressed businesses at this time of economic uncertainty,” they write.

David Lonsdale, director of the Scottish Retail Consortium, said:This is a powerful statement from a broad and formidable cross section of business and industry in Scotland that action must be taken to scrap the £62 million tax hike and restore the level playing field on business rates with England.

“The Brexit vote has only made it even more crucial for the Scottish Government to take tangible action to reduce the cost of doing business, and scrapping this Scotland-only surcharge ought to be the very first step they should take.”

Scottish Conservative shadow economy secretary Dean Lockhart said:This joint letter acts as a reminder that the SNP must now start to heed warnings that Scotland is becoming the least competitive part of the UK to do business.

“It is blatantly unfair that firms in Scotland should pay more in tax than their competitors across the rest of the UK, and it’s remarkable the SNP can’t recognise this.”

The letter in full:

“We do not yet know what the full economic consequences will be of the vote for the United Kingdom to leave the European Union but we welcome the Scottish Government’s continued commitment to support Scotland’s businesses wherever it can.  The Scottish Government has a range of powers at its disposal which could be used now to deliver such support, including control over one of the principal business taxes: Business Rates.

“Our organisations have a range of ideas on how Scotland’s system of Business Rates could be used to deliver the support to businesses that the Scottish Government is committed to, but we collectively believe that one measure requires to be taken in your upcoming Budget in order to level the playing field on Business Rates between Scotland and England.  That is, to reverse the decision to double the rate of the Large Business Supplement from 1.3 pence in the pound to 2.6 pence in the pound.

“This supplement affects one out of every eight commercial premises in Scotland and is expected to add a further £62 million to these businesses’ rates bills in the current year.  Reducing the surcharge to the level which applies in England would not only be fair and make Scotland’s Business Rates more competitive, but would also help to reduce the cost base of many hard pressed businesses at this time of economic uncertainty.

“We appreciate that the 2017 rates revaluation is looming and that the work of the Barclay Review of Business Rates is just beginning to get underway, but a reduction in the Large Business Supplement back to 1.3 pence would go a long way to levelling the Business Rates playing field across the United Kingdom.

Yours sincerely,

Hugh Aitken, Director, CBI Scotland

Richard Bird, Executive Officer, British Aggregates Association

Bryan Buchan, Chief Executive, Scottish Engineering

Liz Cameron, Chief Executive, Scottish Chambers of Commerce

Pete Cheema, Chief Executive, Scottish Grocers Federation

Marc Crothall, Chief Executive, Scottish Tourism Alliance

David Frost, Chief Executive, Scotch Whisky Association

David Lonsdale, Director, Scottish Retail Consortium

Willie Macleod, Executive Director, British Hospitality Association Scotland

Ross Martin, Chief Executive, Scottish Council for Development and Industry

David Melhuish, Director, Scottish Property Federation

David Thomson, CEO, Scottish Food and Drink Federation

David Watt, Executive Director, Institute of Directors Scotland

 



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