Retailers in Scotland will be hit by the Scottish Government’s failure to introduce business rates transitional arrangements, according to the Scottish Retail Consortium (SRC).
The SRC said although smaller firms will get a boost, the Government is wrong not to help larger retailers who now face huge rises in their rates bills all in one go. It said they will be at a disadvantage to competitors in the south who benefit from transitional arrangements.
It said the Government should have smoothed out the increases in business rates between now and the next revaluation in five years.
The new rateable values apply from April 1.
Business rates are re-calculated every five years based on how much business properties would rent for. And every year the Scottish Government decides a ‘pence in the pound’ charge. Business rates bills are calculated by multiplying the ‘pence in the pound’ figure by the rateable value.
The Government decided on 40.7 pence in the pound last November – the same figure as other parts of Britain – but has only just published the new rateable values. Retailers now have less than 50 days to plan their finances. By contrast, shops in England and Wales have known what their rates will be since October.
Ian Shearer, Scottish Retail Consortium director, said: “Retailing is one of the biggest contributors to business rates and many companies will face very substantial hikes in property taxation. It’s unbelievable that Scottish retailers facing big tax hikes will not be allowed to spread the costs over five years, unlike shops in other parts of Britain, when they’re also dealing with tough trading conditions.
“A sudden, unexpected increase in business rate costs will damage cash flow and retailers’ ability to maintain and create jobs and investment. Retailers are central to the Scottish economy and the recovery.”