Firms facing ‘cliff edge’ over business rates hikes

February 15 2017, 7.00amUpdated: February 14 2017, 4.59pm
© Getty ImagesRuth Davidson.
Ruth Davidson

Derek Mackay is under pressure to agree to a showdown with MSPs over business rates rises amid claims the hikes could force firms out of business.

The Scottish Conservatives have demanded the Finance Secretary makes an urgent statement to Holyrood to explain how he will help businesses that are “staring down the barrel of a gun”.

The call comes as the trade association for commercial and residential property companies warned that firms in Tayside and Fife face having to make redundancies or close down altogether because of the rates increases.

David Melhuish, director of the Scottish Property Federation, called for Mr Mackay to offer financial relief to those worst affected.

He added that only doing the revaluation process every seven years “leaves businesses facing a cliff edge”.

“I think it’s clear from what we are hearing from businesses that this is going to end up in job losses,” he added.

“Some are saying these increases will mean they have to close down.”

Forfar Road service station is being hit with the biggest hike in Tayside – a 220% rise from £15,000 to £48,000 a year.

The rises are down to a revaluation by the Scottish Assessors Association of rateable values – how much a commercial premises is worth on the rental market.

It was carried out in 2015 and the changes will kick in on April 1 after the changes are finalised in March.

Ruth Davidson, the Scottish Conservative leader, said: “This revaluation could see businesses across the country going under, it’s as simple as that,” she said.

“If that’s not cause for the SNP government to act, I don’t know what is.”

Scottish Labour economy spokeswoman Jackie Baillie said: “Ministers have a duty to engage with the business community, and with parliament, about these changes.”

A Scottish Government spokesman said: “Rating valuation of business properties is undertaken by independent assessors, funded by local councils, not the Scottish Government.

“Each council retains all the business rates revenue it collects and it is for councils to apply rates reductions, on top of existing statutory reliefs, as they see fit.”

He added the Scottish Government has announced a package of reforms to reduce business rates, which includes a small business bonus scheme that will lift 100,000 properties out of rates completely.

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