In a Preliminary Response to the Scottish Government’s Budget
2024-2025, David Lonsdale, Director of the Scottish
Retail Consortium, said:
“By freezing the headline business rate the Finance Secretary has
listened and acted on industry representations. Whilst smaller
retailers are set to miss out on the temporary rates relief
available to counterparts in Wales and England, this freeze will
protect most shops from rates rises which would have hammered
high streets across the country.
“However, a larger proportion of retailers operate from medium
sized and larger premises. As such it is deeply disappointing
the Finance Secretary has fumbled the chance to support all
stores, given her plan to make the four and a half thousand shops
– and twenty-two thousand commercial premises overall – which are
liable for the intermediate and higher business rate pay more in
tax. For these firms their business rate will now escalate to a
25-year high and add millions of pounds to their rates bills.
Indeed, many stores and commercial premises will continue to pay
a higher business rate than competitors and counterparts down
south. All of this could well have implications for the viability
of some stores.
“Over and above this, it is alarming and troubling that Scottish
Ministers are countenancing re-introducing a Public Health
Supplement surtax on larger grocery retailers. More so given the
New Deal pledge to involve business at the inception of policy
development. This Scotland-only stealth tax could open the door
to an unwarranted tax grab and impact grocery prices for
customers, with these same grocers already having been lumbered
with tens of millions of pounds in costs for the DRS farrago.
“Retailers will also be relieved to see those on fixed and modest
earnings being protected from increases in income tax, which
alongside the council tax freeze should help consumer spending
during this very difficult time for households. However, like
with larger properties, there will be a nervousness around the
intent to increase the number of those paying higher tax rates.
It adds further complexity to existing tax rules and makes it
more expensive and challenging for Scottish employers to attract
and retain the specialist and senior talent they need. It’s
important Scottish Ministers don’t incentivise businesses to
locate the highest paid roles and commercial operations outwith
Scotland, which will long-term reduce the ability of the private
sector to deliver the high paid jobs we need to grow the economy.
“Ultimately this year’s Budget is slightly confused. What
will be needed going forwards are clear signals to businesses
that driving economic growth is the priority. A good place
to start would be by recasting business rates for the years
ahead, beginning with a timetable for lowering the poundage for
all to a permanently lower level and faster restoration of the
level playing field with England on the higher property rate and
shelving the notion of a new grocery tax.”
Ends
- The SRC’s Budget Submission can be read in full here:
https://brc.org.uk/news/2023/scottish-budget-src-seeks-action-on-deficit-tax-growth/
- On Page 40 of the Budget it states: “Recognising the
importance of sustaining the public finances and public services,
we are also committed to exploring the reintroduction of a
non-domestic rates Public Health Supplement for large retailers
in advance of the next Budget”
