Mackay announces new package
Retail chief ‘alarmed’ by new business rates levy
David Lonsdale: ‘New surcharge is at odds with the Government’s ambition’ (photo by Terry Murden)
Retail industry leader David Lonsdale today expressed alarm at Finance Secretary Derek Mackay’s surprise new tax on out of town and online firms.
Mr Mackay announced the proposed new levy as he committed the government to a package of changes to business rates outlined in the Barclay review.
Businesses welcomed a number of measures, including more frequent revaluations, but retailers were shocked the prospect of an added levy.
David Lonsdale, director of the Scottish Retail Consortium, said: “We’re pleased to see Scottish Ministers take forward a number of very welcome steps to modernise the business rates system, particularly more frequent revaluations, reducing by half the time taken between valuations and them coming into force, and greater standardisation of bills.”
However, he said the new levy was the last thing hard-pressed retailers wanted to hear.
“The prospect of an additional business rates levy on firms located out of town and which operate online is alarming.
“Despite the Barclay reforms, the overall rates burden remains onerous. Over and above the headline poundage rate many retailers also already pay the large firms’ business rates supplement and often a Business Improvement District levy on top.
“This new business rates surcharge is at odds with the Scottish Government’s ambition of delivering a competitive rates regime, and introduces a fresh element of unpredictability into the system.
“It will do little to aid town centres since it is not an answer to the high cost of operating on our high streets, nor to the profound shift in consumers shopping habits. The Finance Secretary should firmly knock this new tax on the head.”
Last week the Scottish Government’s Annual Business Statistics revealed that the total tax burden faced by Scotland’s retail industry leapt by 27.9% to £579.3 million over the nine years to 2016.
Small businesses welcomed the broader package, including the revaluation and rates relief promises. Stuart Mackinnon, the Federation of Small Business’s external affairs manager for Scotland, said: “Tens of thousands of local businesses receive vital rates help from the Scottish Government through the Small Business Bonus relief.
“Ministers are absolutely right to complement this support with administrative and legislative reforms designed to deliver a modern tax system. For example, more frequent revaluations should ensure property valuations better reflect market conditions.
“By giving extra rates support to day nurseries and firms looking to improve their premises, the Scottish Government continues to show their commitment to local economies.
“As Ministers press ahead with implementing the Barclay reforms, they must keep the needs of smaller firms at the front of their minds.”
Announcing a consultation exercise ahead of introducing legislation early next year, Mr Mackay said: “The launch of this consultation marks the next step in our reform of the business rates system following the Barclay review.
“It seeks the views of business and other stakeholders on the proposed legislative changes that we intend to bring forward to ensure we maintain a competitive advantage for Scottish ratepayers.
“I would encourage all stakeholders to engage fully with this consultation process.
“The recommendations of Barclay, alongside others in the Budget strike the right balance between offering a competitive and sustainable taxation environment while delivering sufficient resources to fund the public services which we all rely.
“In April I introduced a number of measures to underpin that competitive advantage. The growth accelerator and 100% relief for new build properties until first occupied will support speculative development and encourage improvements to our building stock, while our new targeted nursery relief will support a sector that is vital to ensuring an inclusive workforce. These measures are unique in the UK and apply equally to the public, private and third sectors.
“I am confident that these measures will not only attract new investment into Scotland, but also incentivise new developments and support employment.”
Scottish Labour’s economy spokesperson Jackie Baillie, said:“The reality is that under the SNP the burden on businesses across the country is increasing.
“The shambolic implementation of the revaluation has left many firms confused and facing astronomical increases in their rates, particularly in the north-east.
“The number of appeals against revaluations are through the roof – and thousands have still to be processed.
“Scottish Labour supports a greater frequency of revaluations, but the SNP simply cannot treat our businesses as a cash cow.”