Scottish Budget warning

Pressure mounts on Mackay to abandon business rates levy

David Melhuish 2

David Melhuish: ‘Business rates continues to be a huge issue’ (pic: Terry Murden)


Finance Secretary Derek Mackay is facing further pressure to abandon a plan for new business rates burdens as two industry bodies turn up the heat ahead of the Scottish Budget.

The Scotch Whisky Association is urging Mr Mackay not to introduce a levy on out of town premises as recommended by the Barclay Review. The Scottish Property Federation has also reiterated its opposition to the proposal in a letter to Mr Mackay who presents his Budget on Wednesday.

Twenty one organisations representing manufacturing, retail, energy, commercial property, construction, transport, leisure and tourism have already called for the levy to be dropped, saying it would add to the weight of cost pressures on companies.

Mr Mackay told Daily Business in October that he had “no plan” to introduce the levy. However, it remains an option and has been out to consultation.

In its submission ahead of the Budget, the SPF said: “Chief among the SPF’s list of requests is to reduce the large business rate supplement to at least English levels or removed altogether, as recommended by the Barclay Review. 


out of town ragout

Daily Business reported Derek Mackay’s comments in October


“The SPF also urges the Scottish Government to not introduce an out of town business supplement as it would disproportionately hit an already hard-pressed retail sector.”

SPF director David Melhuish said: Business rates continues to be a huge issue for SPF members.  The Barclay Review advocated bringing Scotland’s Large Business Supplement in line with England and that is something we are pressing the Scottish Government to outline exactly how and when this will be done. 

“On the Barclay recommendation for an Out of Town business rates supplement, we responded formally to the Scottish Government earlier this year and just recently reiterated our concerns, along with a number of others, that we see no merit in introducing such a policy. 

“We also do not see how this tax will make any substantial contributions to town centres.  The economy remains fragile and we do not believe further burdens on businesses will help, particular those in the retail sector where there have been a number of high-profile administrations. 

“We are also greatly alarmed by the 88 new requirements suggested for planning services, including the Scottish Government, in the current planning Bill and we believe the Scottish Government must work with Parliament to reduce these additional burdens.”

David Lonsdale, director of the Scottish Retail Consortium, said: ““If it is true that Scottish ministers are scrapping plans for a new rates levy on out of town and online businesses then that is hugely welcome and positive.

“It would suggest the Finance Secretary has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up against this costly and complex new tax.

“There is still much to be done on rates reform, including restoring the level playing field with England on the large business rates supplement and moving to more regular revaluations as envisaged under the proposed Non-Domestic Rates Bill. We look forward to working with the devolved administration to deliver on this.”

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