Business rates inadequate to raising Scotland’s economic growth and productivity

shutterstock_288563558Scotland’s retail industry is seeking to concentrate the minds of policy makers and politicians on lifting the country’s economic growth and productivity ahead of the 2016 Holyrood election, through unveiling plans for an overhaul of business taxation. 

Launching the first in a series of election policy papers (‘Holyrood 2016: Business Rates’ is attached), the SRC is setting out a range of measures for the reform of the £2.8 billion business rates tax for inclusion as an early priority in the next Administration’s Programme for Government.

A growing coalition of businesses and representative organisations have recently made the case for the fundamental reform of business rates in Scotland.

The SRC has set out medium and longer term ambitions including the need for a firm commitment to a fundamental structural reform of business rates, including consideration of whether the business rates system should remain a property-based tax.

In addition the SRC has set out a range of short term reforms that are urgently required to arrest the number of store closures, assist town centres, support business investment and protect jobs. These measures include the introduction of more frequent revaluations, a lower retail-specific poundage, empty property relief for premises undergoing investment and refurbishment and a wide range of administrative improvements including standardised online billing and a reduction in the number of Assessors from 14 to 1 into a single National Assessor.

Commenting on the launch of the policy paper, SRC Director David Lonsdale, said: “Ahead of the Holyrood election there needs to be a thorough debate about how the next Scottish Administration and Parliament will seek to help raise the country’s rate of economic growth and improve business productivity.

“Lifting private sector investment will be crucial to achieving this. There is a strong and growing consensus across business and industry in Scotland that the current business rates system is inadequate to the task, out of date, no longer fit for purpose and in serious need of fundamental reform.

“The system is a tax on jobs and growth, undermining investment in property, especially in town centres and high streets. There is no greater pressing issue for the retail industry in Scotland than the prohibitive burden of business rates, which has moved in the eyes of many retailers from an irritation to mission critical in recent years.

“This is not just a problem for businesses, store closures have a significant and detrimental impact on communities and town centres and lead to a loss in government revenue through other taxes.

“That is why we have launched our proposals for reform which are vital for securing a competitive business environment in Scotland.”

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