Jatinder Chall: Putting a lid on business rates

Finance Secretary Derek Mackay 'didn't go far enough' with his rates relief package, argues Jatinder Chall. Picture: Lisa Ferguson
Finance Secretary Derek Mackay 'didn't go far enough' with his rates relief package, argues Jatinder Chall. Picture: Lisa Ferguson
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It might have got a little lost in the controversy over tax rises for the self-employed, which broke a Conservative Party manifesto promise not to raise National Insurance contributions, but Phillip Hammond’s Budget did address another growing controversy: spiralling business rates.

Unfortunately he could only take action in England – so it’s critical that Finance Secretary Derek Mackay does the same for Scotland.

It’s critical that the Scottish Government keeps business rates down

A long-delayed revaluation of property values had left some businesses facing tax rises of 350 per cent or more – threatening to forcing many out of business.

READ MORE: Derek Mackay climbs down on business rates after outcry

The Chancellor announced that any businesses coming out of small business rate relief as a result of the imminent property values revaluation south of the Border will see tax increases capped at £50 per month. He also announced a £300 million hardship fund for councils to provide discretional relief to affected businesses.

These changes will not affect us here in Scotland, where business rates are devolved to the Scottish Government. But businesses here are currently undergoing a similar revaluation. And so far, Mackay has only promised to protect some of them.

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Last month the Holyrood finance secretary promised to cap rate rises for the tourism and energy sectors. He also announced appeals will be free in Scotland, unlike in other parts of the UK. But he didn’t go far enough.

Granted, Hammond did single one sector out for special treatment – with pubs set to get a discount on their rates – but apart from that every business benefits equally from the new protections. We need that in Scotland too.

Derek Mackay has promised to work with local authorities to introduce a business rate system which supports key local economic sectors, and here in Glasgow sectors including design and engineering, life sciences and financial services need the same support which has already been offered to the tourism and energy sectors.

Whether our future lies in independence or within the United Kingdom businesses like these are critical to our financial future and we desperately need to attract, retain and support them.

The Budget also handed the Scottish Government an extra £350m of spending power and some of that windfall needs to go towards matching England’s small business rate relief cap – ensuring rates do not increase by more than £50 a month.

The government also needs to offer further tax relief for small start-ups firms that provide employment and training to their staff.

The last thing we want is for our best young businesses to relocate south of the Border for tax reasons – that’s why it’s critical that the Scottish Government keeps business rates down if we are to keep up with the rest of the UK.

• Jatinder Chall is a partner with MacRae & Kaur Solicitors

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