Scotland business

Retailers call for 'fundamental' business rates reform

Banknotes Image copyright AFP

Scottish retailers have called for the business rates system in Scotland to be "fundamentally reformed", claiming up to a quarter of shops could close if the current arrangements continue.

The Scottish Retail Consortium (SRC) said a new "flexible, simple and competitive" system should be created.

It argued the existing system did not reflect current economic conditions.

The Scottish government said it was "doing everything" within its powers to support the economy.

It said that included "action to maintain a competitive business rates regime".

The call by SRC came in its submission to a review of rates which is due to report to the Scottish government in July next year.

SRC was one of a number of organisations which called last month for a hike in tax rates for big firms to be reversed.

In its submission to the review, the lobby group called for regular revaluations of business premises to ensure the system "better reflects the economic conditions", and a single assessor - instead of the current 14 - to carry out assessments.

The SRC also wants to see poundage rates reduced to ensure they are "at least competitive with the rest of the UK", as well as a commitment to set a Scotland-wide poundage rate rather than devolving that power to local authorities.

The organisation said there should also be a "fundamental review" of existing exemptions, with the aim of creating a simpler and fairer system with fewer exemptions and reliefs.

'Not sustainable'

SRC director David Lonsdale said: "We now have the opportunity to create a modern business rates system which promotes economic growth, investment and productivity.

"We believe the review should create a rates system which is flexible, simple and competitive."

He added: "Scottish government figures show that 10,000 jobs and 1,700 shops have been lost in the last seven years in the industry.

"In that time revenue from rates has grown by 42.5%. This is not sustainable, and without urgent reform up to a quarter of Scotland's shops will be at risk of closure, with the consequent impact on the Scottish economy."

A Scottish government spokeswoman said: "We are doing everything within our powers to support our economy, including action to maintain a competitive business rates regime - for example, our small business bonus has already delivered over £1bn in savings for smaller firms.

"We commenced an external review precisely so we could engage with business and explore how rates can better reflect economic conditions and support growth.

"We warmly welcome the contributions of the business community to that process."

Related Topics

More on this story