Fife Council has been branded “shameful” for suggesting small businesses shoulder more of the business rates burden.
Lesley Laird, the depute leader of the Labour-run council, called for a system in which “everyone pays their share”, saying it is unfair to exempt an increasing number of firms from the tax and expect larger ones to make up the shortfall.
The Federation of Small Businesses warned that making smaller firms cough up would lead to closures and redundancies.
Cllr Laird said: “While reliefs are welcome for businesses, is the Scottish Government really saying that its primary objective here is to take more and more businesses completely out the rates system, and for the rates burden to be shared by a small number of larger businesses?
“Many of these businesses in Fife are the anchors to our town centres and industrial areas.
“In turn, surely, we must be looking for a rates system that is fair to all, and where everyone pays their share, which is currently not the case.”
Jenny Gilruth, the SNP MSP for Mid Fife and Glenrothes, described the comments by Cllr Laird as “completely shameful”.
“To suggest the small business bonus, which helps reduce the burden of rates on small businesses that are the lifeblood of Scotland’s economy, is somehow a bad thing shows just how little this Labour party cares for local businesses in Fife,” she said.
The Scottish Government’s system sees half of firms paying no rates at all.
Those with premises worth £15,000 or less on the rental market are exempt, which is up from £10,000 on the previous year.
On top of that, Finance Secretary Derek Mackay was this week forced into a new £45m relief package to stave off a rebellion over huge hikes for some firms brought about by an independent revaluation of premises.
That includes a 12.5% cap on rates rises for the hospitality sector across Scotland and offices in the north-east.
Cllr Laird said although the relief is a good result for many hotels and cafes, it is the latest in a series of “knee-jerk” measures from the SNP administration and fundamental reform is needed.
Colin Borland, FSB’s head of devolved nations, said they agree with Fife Council that more needs to be done to improve the rates system.
“I’m sure no-one is suggesting that we let local firms go to the wall just so we can reduce large multinationals’ or the public sector’s rates bills by a few per cent,” he said.
“But we need to be clear that cancelling the rates relief that 100,000 small firms across Scotland receive would see businesses closed, jobs lost and investment cancelled.”
Alan Mitchell, the chief executive of Fife Chamber of Commerce, said he backed the small business bonus scheme, but shares some of the concerns outlined by Fife Council.
He added: “The system just isn’t working. People are losing confidence.”
A major review of the business rates by former RBS chairman Ken Barclay is due to be published in July.
