Business rate defence provokes fresh anger

Published on Friday 14 May 2010 21:05

EFFORTS by the Scottish Government to quell controversy surrounding its new business rate structure appeared to fall short yesterday, as the row over the abolition of transitional relief continued.

An official analysis showed that 60 per cent of all ratepayers have seen their bills fall or remain the same since 1 April, when the new tax rate on non-domestic buildings took effect. In contrast, an estimated 79 per cent would have been worse or no better off "had the Scottish Government decided to introduce a transitional relief scheme similar to that in England".

The average savings for those who are better off amounts to 1,300 per property. A spokesman for the Scottish Government said there was no corresponding figure for those who were worse off.

However, many have experienced steep increases, in some cases amounting to 100 per cent or more. These are the firms facing the biggest squeeze due to the lack of transitional relief like that in England, which caps changes in rates bills and phases them in over five years.

Among the worst hit have been nurseries, pubs, hotels and other leisure venues. Private nursery Little Flyers in Edinburgh's Ingliston Road says its rates have gone up by 154 per cent, while the city's Prestonfield House Hotel says its payments have doubled.

Scottish Liberal Democrats seized on yesterday's figures, accusing the government of producing only a "partial" analysis.

Lib Dem finance spokesman Jeremy Purvis said: "Even with this seriously flawed so-called analysis, it is clear 1,700 hotels are facing crippling increases."

The Scottish Chambers of Commerce said evidence from its members suggested the removal of transitional relief had produced a "very significant negative impact" on a variety of businesses. Finance secretary John Swinney is due to meet Chambers' representatives in both Edinburgh and Aberdeen to discuss the issue.

Adding to the pain in Edinburgh is the net loss of rate payments made by businesses within the capital. The city council collects business rates on behalf of the Scottish Government, which in turn redistributes those funds. Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, has claimed this has resulted in 1 billion flowing out of the city during the past ten years.