Bills 'to go up'

Inflation may force £205m business rates hike

David Lonsdale
David Lonsdale: a challenge for retailers (pic: Terry Murden)

Businesses in Scotland could be forced to pay an additional £205 million in rates because they are tied to the rate of inflation, an industry group has warned.

The poundage for non-domestic rates is calculated using the consumer price index (CPI), which came in at an unchanged 6.7% last month.

David Lonsdale, director of the Scottish Retail Consortium, said using this measure would impose a £43m bill on shops from April.

He estimates that the bill for all ratepayers would increase by £205 million and stated: “It would pose a challenge for retailers and other sectors with a significant property footprint, as well as for retail destinations.”

In June the Scottish Fiscal Commission projected 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 said this would add £34m 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.

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