Rate cut for businesses to counter empty high streets

By ERIKKA ASKELAND
Published on 26/09/2012 00:00

THE SCOTTISH Government has unveiled a scheme that promises to slash rates for businesses that move into a shop or office that has lain empty for more than a year.

Industry leaders yesterday cautiously welcomed the “Fresh Start” initiative but warned companies still face having to pay tens of millions in tax hikes and levies. It came as new research showed that smaller firms in Scotland are delaying investment plans due to their gloomy outlook on the economy.

Fresh Start, put forward by local government minister Derek Mackay, will allow new occupants of shops or offices to apply for a 50 per cent discount on their business rates for a period of 12 months.

The government said that the rates cut will mainly be targeted at businesses which are above the threshold for the Small Business Bonus Scheme (SBBS), which reduces rates for some businesses to zero, as well as those which currently get SBBS to expand into larger premises.

Colin Borland, head of external affairs for the Federation of Small Businesses (FSB) in Scotland, said: “A rates discount for properties brought back into use is a great idea that we hope can be made to deliver for Scottish town centres and high streets.

“The details of the scheme will be crucial to its success and we hope that all sorts of small enterprises can benefit.”

The CBI also welcomed the move but pointed out the government was still expecting to squeeze £36 million from landlords through legislation that reduces reliefs on empty properties.

David Lonsdale, CBI Scotland’s assistant director, said: “This new time-limited rates concession is welcome recognition of the importance of keeping business taxes down as a means of boosting demand for commercial premises.

“However, the Scottish Government should go much further and think afresh about their current legislative plans which seek to penalise firms with empty premises to the tune of £36m in additional business rates rise over the next two years.”

However, government plans to revive the high street could be slowed as Scottish small businesses are delaying investment plans according to the FSB’s “Voice of Small Business” confidence index.

It said Scottish firms expect their levels of capital investment to drop over the next year due to low confidence. Almost 16 per cent expect this investment to “significantly” decrease.

Andy Willox, the FSB’s Scottish policy convener, said: “Low consumer and business confidence is putting small businesses off investing. Rising overheads, big business customers paying late and a lack of flexible, affordable finance are compounding this uncertainty.

“There are well-meaning initiatives to boost confidence out there, but we need to get to grips with the details now if they are going to work to the extent we need.”