SRC calls on Mackay to forgo inflationary rise
THE Scottish Retail Consortium has called on the Scottish Government to freeze the poundage rate used to calculate business rates in its next Budget.
Last year, finance minister Derek Mackay reduced the increase to the poundage rate by capping it at the lower CPI inflation figure, as opposed to the RPI figure that was used previously.
However, the SRC has claimed a poundage rate increase based on August’s 2.7% CPI would see Scottish retailers facing an additional £18m in annual rates bills.
Should Mackay revert to RPI, that liability could rise an additional £23m.
Business rates in Scotland are calculated by multiplying a property’s rateable value by the poundage rate, which is currently set at 48p. Properties with a rateable value over £51,000 must pay an additional Large Business Supplement of 2.6.
SRC director David Lonsdale said: “Retailers are already facing stiff headwinds from rising costs and cash-strapped consumers. With stores under enormous pressure, and sadly closures becoming a feature in many places, it’s ridiculous to consider further increasing property taxes paid by businesses often operating on a knife edge.
“Whilst there may be a superficial appeal to squeezing the last penny out of stretched businesses, doing so puts stores at risk, threatening jobs and future tax revenues.
“The SRC are calling for a freeze on the poundage in this year’s Scottish Budget. This isn’t about paying less, it is simply not reasonable to continue hiking up bills on struggling businesses. With the retail industry, and indeed the Scottish economy, going through a period of immense change under enormous pressure, this is the time to focus on growth not on further tax rises.”
