Sharp hike in business rates ‘to hit firms next year’
Businesses could be hammered by another sharp rise in business rates next year, according to the government’s budget forecasting group.
The Scottish Fiscal Commission is projecting a 5.4% uplift in the headline business rate next April, taking the poundage – or tax rate – from 49.8% to 52.5%. This would push the poundage rate through 50% for the first time since devolution.
It would add £34 million on to the rate bills for shops, a further £6.4m for hotels and £2.4m for pubs. Factories would be hit with a £27.5m hike while offices would face a £22.2m extra payment.
David Lonsdale, director of the Scottish Retail Consortium, says: “Of course, the setting of the poundage rate is a decision entirely for ministers and usually comes in the Scottish Budget each autumn, however it is interesting to see the government’s independent forecaster pencilling in this 5.4% increase.
“Given the challenging economic backdrop this looks like a chunky uplift in the business rate is being pencilled in for next Spring.
“We fully recognise the public sector – like commerce – is facing its own costs and inflationary pressures, however with the headline business rate already at a 24-year high any increase of this magnitude could add £34 million to retailers’ rates bills and pose a challenge for other sectors with a significant property footprint.
“We hope the Finance Secretary will carefully assess the impact on firms and retail destinations when she comes to set the business rate in this autumn’s Scottish Budget.”