Robison warned

Retailers fear £43m business rates hit in Budget

David Lonsdale
David Lonsdale: shops are staring down a barrel (pic: Terry Murden, DB Media Services)

Retailers are warning Finance Secretary Shona Robison that they will face a £43 million hike in costs if she raises business rates in line with September’s inflation rate.

The Fraser of Allander Institute has calculated that lifting the headline business rate by 6.7% will see it escalate to 53.1p in the pound.

This would pierce the 50p/50% threshold for the first time since the advent of devolution in 1999. It was 40.7p in 2010-11, so a rise to 53.1p next Spring would represent a 30% hike since then.

Ahead of the Scottish Budget on 19 December, David Lonsdale, director of the Scottish Retail Consortium, said: “Retail sales have fallen in real terms for each of the past five months and the economic outlook is uncertain.

“Yet it seems Scotland’s retailers may be staring down the barrel of a hefty £43 million hike in their business rates bills next Spring.”

Mr Lonsdale, who was among 35 signatories to a letter two weeks ago calling for a rates freeze, added: “The business rate is already at a 24-year high and a fifth higher than at the start of the previous decade.

“An uplift of this magnitude would be wholly at odds with the Scottish Government’s pledge to use business rates to ‘boost business’ and would undermine efforts at high street and town centre rejuvenation

“We hope the Finance Secretary will blunt any uplift in the business rate in next week’s Budget and give Scotland’s ratepayers a meaningful competitive advantage over their competitors and counterparts down south.”

Mr Lonsdale’s call comes amid further speculation that the Scottish Government will introduce a new income tax band set at 44p for those earning between £75,000 and £125,140.

Ministers say this will raise about £200m, helping to plug what is likely to be a black hole of between £1 billion and £1.5bn.

The Fraser of Allander Institute has calculated that it would raise no more than about 20% of that total.

Business leaders have urged the government to think again about the tax plan, arguing that it would further widen the tax take north and south of the border and would deter investors and high earners coming to Scotland.

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