Robison urged to freeze business rates in Budget

Business groups have called on the Scottish Government to freeze non-domestic rates in the upcoming Budget.

Deputy First Minister Shona Robison – who also serves as Finance Secretary – will lay out her tax and spending plans on December 19 before they are decided on by Holyrood in the spring.

Ahead of the announcement, the Scottish Retail Consortium (SRC) and the Federation of Small Businesses (FSB) have urged her to take action on business rates.

In a letter to Ms Robison’s junior minister Tom Arthur, SRC director David Lonsdale said current business rates – which are set by the Scottish Government but collected by local authorities from companies – are at an “onerous” 24-year high, and 20% higher than in 2010.

If the rate is increased in line with the inflation rate in September – 6.7% – companies in Scotland would have to pay £205 million more than last year.

“We would ask the Scottish Government pursues a more enlightened approach than the Chancellor and acts to freeze the headline poundage rate for the coming year, as recommended by 35 leading industry bodies in a joint letter to the Finance Secretary earlier this month,” Mr Lonsdale said.

“If ministers are unwilling to do that then at the very least they should blunt any inflationary uplift in the headline rate, and give ratepayers in Scotland a meaningful competitive advantage over their counterparts and competitors down south.”

Meanwhile, FSB Scotland’s submission to the Finance Secretary ahead of the Budget said: “Given the ongoing cost-of-doing-business crisis, FSB Scotland is also supporting the industry-wide ask  of the Scottish Government to freeze the poundage rate for another year, which would help ease the burden at this difficult time and support our shared objective of delivering more sustainable economic growth.”

As well as freezing the rate, the body has urged ministers to reintroduce targeted relief for businesses in the retail, leisure and hospitality sector.

Such reliefs were first put in place during the pandemic to counter the impact of lockdown in the industry, and FSB Scotland policy chairman Andrew McRae said there is now a “strong case” for their reintroduction.

“Last week, the Chancellor used his autumn statement to extend targeted rates reliefs for those in retail, leisure and hospitality in England for another year,” he said.

“We of course have a different system north of the border, but the particular mix of challenges these sectors face – from their exposure to energy costs, food price inflation, staffing availability, faltering consumer confidence and more – still apply.”

The group also called for the protection of the Small Business Bonus Scheme – which offers relief to small businesses.

Mr McRae said: “Last year’s Budget saw the surprise move to raise the qualifying thresholds, bringing some small businesses into paying rates for the first time.

“The effects of these changes will continue to ripple through the economy as the transitional relief tapers off over the next two years, so this is not the time to make any further amends.”