Council tax Scotland: Business groups urge Scottish Government to freeze rates next year after Humza Yousaf SNP conference announcement

Organisations including retailers, wholesalers and manufacturers have signed a joint letter

Thirty-five leading business groups and industry bodies have jointly written to the Scottish Government asking it to freeze the business rate in the coming financial year.

The organisations – which include the Scottish Chambers of Commerce, CBI Scotland and the Scotch Whisky Association – cited the ongoing “costs crunch”.

They said the move would “help ease the burden at this difficult time, and support our shared objective of delivering more sustainable economic growth”.

Business bodies are calling on the Scottish Government to freeze rates

The signatories include retailers, wholesalers and manufacturers, as well as tourism, leisure and commercial property firms. They said Scotland’s business rate is already at a 24-year high and is a fifth higher than at the start of the previous decade.

If increased in line with current CPI inflation, this could see ratepayers across Scotland face an extra £205 million on their rates bills from next spring, the groups said.

David Lonsdale, director of the Scottish Retail Consortium, said: “A formidable cross-section of representatives of Scottish industry and commerce have delivered an unequivocal message to the Finance Secretary [Shona Robison] that the business rate must be frozen next year. That’s evidence of how challenging the economic environment is, and we hope Ms Robison will take heed and act in her Budget next month to protect Scottish businesses and jobs.”

Ms Robison will deliver the Scottish Budget on December 19 amid a challenging financial backdrop, with concerns over a looming £1 billion black hole.

The letter reads: “We fully recognise that the Scottish Government, like business, is facing its own costs and inflationary pressures at the present time. The work to improve the administration of the rates system through the New Deal for Business is encouraging, as is the headway made in recent years on broader aspects of reform including more frequent revaluations, the retention of the uniform business rate, and the pledge to restore parity on the higher property rate with England which should benefit 11,650 commercial premises here in Scotland.

“Yet, after three and a half turbulent years of the pandemic and costs crunch the fact is trading conditions remain challenging, the cost of doing business remains elevated, and the near-term economic outlook is weak.

"We therefore ask that Scottish ministers prioritise a freeze in the headline business rate poundage – which is already at a 24-year high - in the coming financial year. This would aid firms with the costs crunch, help them keep down prices for customers, and support business investment and competitiveness.

"Our organisations have a range of ideas on how Scotland’s rates system could be improved. However, we collectively believe this practical measure to freeze the business rate requires to be taken in your upcoming Scottish Budget, which would be a positive step applicable to all commercial premises, help ease the burden at this difficult time, and support our shared objective of delivering more sustainable economic growth.”

A Scottish Government spokesman said: “Scotland already has the lowest poundage rate in the UK, after freezing it as part of the 2023-24 Budget. Any decisions for 2024-25 will be made as part of the Scottish Budget process.

“In the meantime, the Scottish Government will continue to do all it can to support businesses in response to the cost-of-living crisis, including pressing the UK Government for support with high energy bills. The New Deal for Business Group, which has wide representation from the business community, also continues to consider issues regarding Non Domestic Rates.”