Holyrood under pressure as business taxes face reform
Philip Hammond: proposing changes
The Scottish government will come under pressure to reform two key business tax policies following pledges from Tory ministers.
Chancellor Philip Hammond is considering a revamp of the apprenticeship levy while Business Secretary Greg Clark is looking at a shake-up of business rates.
Any changes would initially impact on England only, leaving Holyrood to decide whether or not to follow suit.
The apprenticeship levy has been criticised for adding to business costs and failing to boost the number of apprentices, while business rates are proving a particularly onerous burden on retailers in the battle with online operators.
The Scottish government is already in the process of reforming rates along lines proposed in the Barclay Review, but some businesses say they do not go far enough.
The apprenticeship changes proposed by Mr Hammond will include an option for large firms to transfer unused levy funds down to smaller firms in their supply chain.
There was immediate support for the planned review of the levy from Adam Marshall, director general of he British Chambers of Commerce, who said: “We have spent months pushing ministers to make practical changes to the way the apprenticeship levy works, and the measures announced today are an important step in the right direction.
“However, the review announced by the Chancellor must introduce greater flexibility to the apprenticeship system, to ensure that businesses of all sizes can find and train the workforce they need.
“The Chancellor is right to heed our calls for large firms to be allowed transfer unused levy funds down to smaller firms in their supply chain, helping more SMEs to access high quality apprenticeships and close the growing skills gap.
“The government should go even further in the long-term, and allow levy-payers to transfer 50% of their funds, so that more companies in complex supply chains can train their people and boost productivity.
“Ministers also need to urgently address the issues faced by smaller firms, not just by the bigger levy-payers. SMEs may not be paying the levy, but they have faced higher recruitment costs and great difficult accessing the right training in recent months.”
Dr Marshall said: “Philip Hammond is setting the right mood music by highlighting that it is business that drives prosperity and growth for everyone.
“While businesses will welcome the Chancellor’s pro-enterprise tone, they will be looking to his upcoming Budget for concrete action to boost investment and confidence.”