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Scottish business rates changes to hit large firms

Big businesses in Scotland will be hit by higher costs under business rate changes outlined by finance secretary John Swinney in his draft budget yesterday.

The Scottish government has announced it will launch a review of business rates and said it will protect the Small Business Bonus Scheme, which delivers rates reductions for nearly 100,000 firms across the country, but increase the Large Business Supplement.

It said: “In the face of a declining rate of receipts from non-domestic rates, it is reasonable to make a modest increase to the Large Business Supplement and make changes to some other reliefs.”

The Large Business Supplement has doubled from 1.3p to 2.6p in the pound from April. The rate was previously linked to the Small Business Bonus Scheme, which has stayed the same. The new funds raised will be used for education and innovation.

“This move has abandoned the level playing field there was with England and it has come as a bit of a shock,” said Ken Thurtell, partner at property management consultant Gerald Eve and head of the firm’s Glasgow office.

“The government has also changed the way that the empty property rate relief works so previously empty retail properties received 100% rates relief for three months then 10% thereafter, whereas this has now been reduced to 50% for the first three months then 10% thereafter.

“It is really a naked moneygrabbing exercise from the government,” said Thurtell.

Scottish Retail Consortium director David Lonsdale welcomed the review of business rates, but called the hike in the Large Business Supplement “concerning, as it appears that large companies in Scotland will be paying more in business rates than comparable firms south of the border”.

“That would be a departure from the pledge to keep rates here at the very least in line with the rest of the UK, and undermines claims to have the most competitive rates regime in the UK,” he added.

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