Scotland politics

Call to reverse Scots increase in business rate for big firms

Bank notes Image copyright AFP
Image caption The Scottish government is currently conducting a review of business rates

Scottish business leaders have written to the finance secretary calling for an increase in tax rates for big firms to be reversed.

Thirteen organisations, including the Scottish Chambers of Commerce and CBI Scotland, signed up to the letter.

They said cutting rates back to be in line with those in force in England would "level the playing field".

An ongoing Scottish government review of business rates is expected to be completed by summer 2017.

A government spokeswoman said rates policies would be "closely considered" for the next budget.

A supplementary tax on large businesses was doubled this year from 1,3p in the pound to 2.6p, in what then Finance Secretary John Swinney called a "modest increase" aimed at maintaining the Small Business Bonus Scheme.

The letter to Mr Swinney's successor Derek Mackay welcomed the government's "continued commitment to support Scotland's businesses" in the wake of the UK's vote to leave the European Union.

However, it then called on the government to "level the playing field" by reversing the increase to the Large Business Supplement.

It said: "This supplement affects one out of every eight commercial premises in Scotland and is expected to add a further £62m to these businesses' rates bills in the current year.

"Reducing the surcharge to the level which applies in England would not only be fair and make Scotland's business rates more competitive, but would also help to reduce the cost base of many hard pressed businesses at this time of economic uncertainty."

'Huge uncertainties'

When the rates increase was announced, Mr Swinney said he was asking Scotland's biggest businesses to pay extra in order to support investment in research and innovation and higher education.

A spokeswoman for the Scottish government said Mr Mackay would meet business representatives to discuss economic recovery.

She said: "The austerity budget handed to Scotland by the UK Government has meant that those paying the large business supplement have a sustainable increase of 3.4% to their rates bill this year, helping to fund local services that support economic development.

"We will closely consider our business rates policies for 2017 to ensure competitiveness in light of the revaluation, and indeed have already pledged to expand the Small Business Bonus Scheme from next year so that it lifts 100,000 properties out of rates altogether."

Other signatories to the letter include the chief executives of the Scotch Whisky Association, the Scottish Tourism Association, the Scottish Grocers Federation and Scottish Engineering, and the directors of the Scottish Property Federation and the Scottish Retail Consortium.

The Scottish Conservatives said the letter was a warning that Scotland is becoming "the least competitive part of the UK to do business".

Economy spokesman Dean Lockhart said: "The doubling of a large business supplement was an action the Scottish Conservatives opposed during the budget and its impact is beginning to be seen right across Scotland as small businesses become trapped in its net."

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