SRC not keen on new rates levers

Online and out of town tax under fire

SRC director David Lonsdale

A PROPOSAL to create a new business rates tax which targets out of town and online retailers has come under fire from the Scottish Retail Consortium, as the retail association offers its views on reforming Scotland’s business rates system.

The Scottish Government’s proposal to introduce a new tax for online and out of town businesses is included in its open consultation on non-domestic rates.

The consultation, launched in response to the findings of the Barclay review of non-domestic rates, suggests a pilot scheme giving councils a new power to increase rates paid by out of town or predominantly online businesses.

It has been argued that giving local authorities this new tax raising power would provide scope for funding rates relief for town centre firms, although this line of reasoning does not seem to hold much water with the SRC.

In its submission, the SRC said it was pleased by the progress which has been made on business rates through the implementation of some Barclay recommendations, but would not welcome a new levy. The SRC reckons handing councils more tax levying powers would bring more unpredictability and complexity into the Scottish system.

David Lonsdale, director of the Scottish Retail Consortium said: “The SRC has campaigned for a fairer and more flexible rates system which better reflects economic and trading conditions.

“Several aspects of the government’s proposals should help to do this, in particular the move to three-yearly rates revaluations.

“However, new legislation is only part of the process of instituting a fairer rates system. An important next step, as recommended by the Barclay report, would be an accelerated timetable to bring the large business rates supplement back into parity with the rest of the UK.

“The overall rates burden continues to be onerous, and is one of the big challenges to retailers operating from property. With shop numbers continuing to fall, action now is essential, both to protect businesses but also government revenue.

“In this context, the ill-considered and poorly timed proposals for an out-of-town rates levy are an unnecessary distraction. We have long argued the rates system is already too complicated and too expensive. Adding an additional tax, on what at this stage appear arbitrary geographical considerations, will do nothing to help struggling town centres.”

The Barclay Implementation consultation will close to submissions on 17 September.