In an open letter published in The Herald newspaper today (10th November), 41 firms and business representative organisations have called on Scotland’s political parties to commit to the fundamental reform of business rates in their manifestos for the 2016 Holyrood election.
The 41 signatories to the letter represent a wide cross section of Scottish industry and include the SRC, SGF, ACS and NFRN.
The collective call comes as firms across Scotland cite the disproportionate and unsustainable burden of the tax as a key factor in holding back investment, job creation and undermining the profitability of their businesses.
As an input tax, business rates fail to flex with the wider economic conditions and take no account of the profitability of a business. This has meant that despite challenging economic conditions over recent years the tax burden on firms has continued to climb. Since 2007, revenue from the tax has increased by over 42% to £2.8 billion. This compares to only around a 7% revenue increase over the same period in council tax, the equivalent property-based tax.
Scotland’s retailers have previously set out a range of short term reforms which they believe are urgently required to arrest the number of store closures and stimulate town centres, investment and jobs. The SRC’s proposals include:
- scrapping next year’s rise in the poundage rate,
- far more frequent commercial property revaluations e.g. at least every 3 years,
- reducing the period between the valuation date and implementation of new valuations from 2 to 1 year,
- a medium-term plan to substantially lower the poundage rate,
- empty property relief for vacant premises undergoing investment and refurbishment,
- administrative improvements including standardised online billing and a reduction in the number of Assessors from 14 to 1
SRC Director David Lonsdale said retailers view the current system as a tax on jobs and growth, undermining investment in new or refurbished shop premises.
Commenting on today’s publication of the letter, he added: “This is a powerful statement from a formidable and broad cross section of business and industry in Scotland that the business rates system is out of date, no longer fit for purpose and in serious need of fundamental reform.
“As the parties finalise their manifestos for the 2016 election now is the time to commit to take action to support businesses and unleash investment in Scotland.”
