Scottish Government plans to reduce the threshold for 100% rates relief, from a rateable value of £15,000 down to £12,000, could hit small businesses and retailers struggling to make ends meet, SGF has said.
Deputy First Minister John Swinney announced a freeze to the Basic Property Rate (‘poundage’) for Business Rates at 49.8p as part of the 2023-24 Scottish Budget (published 15 December). However, proposed changes to the Small Business Bonus Scheme could see many businesses moved from 100% relief down to just 25%.
Previously the 100% relief threshold was set at a £15,000. Now, businesses higher than £12,000 will see a tapered decrease in the support they receive to 25%.
Commenting on the announcement, SGF Chief Executive Pete Cheema said: “SGF has repeatedly called for the Scottish Government to take urgent action to alleviate the pressures on businesses and the convenience retail sector.
“At the very least, the Deputy First Minister should match the targeted support announced for retail in the Chancellor’s Autumn Statement. Instead, many small businesses will see their rates relief dropped by up to 75%.”
Cheema said local retailers are being confronted with an “exceptionally challenging” trading environment – characterised by exposure to soaring energy costs, rising inflation, rising interest rates and a cost-of-living crisis.
He added: “The overdue freeze on the non-domestic Basic Rate is welcome, but the Scottish Government must now go back to the drawing board and deliver meaningful support for struggling businesses instead of trying to pull the wool over people’s eyes.”
Many retail businesses in Scotland are already at a competitive disadvantage to their counterparts in the rest of the UK; the Westminster Government’s Autumn Statement announced an uplift of the Retail, Hospitality and Leisure Relief Scheme, increasing targeted relief for eligible retail businesses from 50% to 75% in the next tax year.
