Thirteen of Scotland’s leading business organisations have written a joint letter to Scottish Finance Secretary Derek Mackay calling for the doubling of the Business Rates Large Business Supplement from 1.3p to 2.6p to be reversed.
Business rates, based on the rateable value of a property, generate around £2.8 billion for Scottish local authorities.
The main poundage rate has increased to 48.4 pence in the pound but companies with a rateable value of more than £35,000 pay the large business supplement.
In England the supplement is 1.3p in the pound but in Scotland it is now 2.6p.
The doubling would generate an estimated additional £62.4 million from 29,119 properties that would pay the supplement.
In Angus the 405 properties would generate an estimated £600,000 and in Dundee the 944 would generate an extra £1.6m.
In Fife the 1,618 properties would generate an additional £4.1m and in Perth and Kinross the 720 would generate an extra estimated £1.1m.
The Scottish business leaders want parity with the system south of the Border.
They include Hugh Aitken, director of CBI Scotland; Liz Cameron, chief executive of Scottish Chambers of Commerce; Marc Crothall, chief executive of the Scottish Tourism Alliance, and David Frost, chief executive of the Scotch Whisky Association.
In their letter to Mr Mackay, they say that with the full economic consequences of Brexit unknown, they welcome the Scottish Government’s continued commitment to support Scotland’s businesses wherever it can.
They say the government has a range of powers to deliver such support, including control over one of the principal business taxes – business rates.
The 13 organisations have a range of ideas on how Scotland’s system of Business Rates could support businesses.
Collectively they believe the one measure that should be taken in the upcoming Budget to level the playing field on Business Rates between Scotland and England is to reverse the doubling of the Large Business Supplement.
“This supplement affects one out of every eight commercial premises in Scotland and is expected to add a further £62 million 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.”
The Scottish Government said it is determined to maintain competitive business rates, and its small business bonus has already delivered over £1 billion in savings for smaller firms.
Mr Mackay will also meet business representatives to discuss economic recovery further.
“We have also commenced an external review to engage with business and explore how rates can better reflect economic conditions and support growth,” a spokesperson continued.
“However, our efforts risk being undermined by the UK Government’s austerity policies and the current lack of action seen since the EU referendum.
“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.”
