Supermarket tax demand to hit Princes Street stores

Published on Friday 10 December 2010 16:51

AT least ten top city-centre stores will be hit with an extra rates demand under a new Scottish Government levy supposedly aimed at supermarkets and out-of-town shopping centres.

Finance Secretary John Swinney announced he expected to collect around 30 million next year from the new tax on retail properties with a rateable value over 750,000.

He said three-quarters of the extra cash would be paid by the largest supermarkets. But the threshold for the levy will also catch many stores in the centre of Edinburgh, including John Lewis, Harvey Nichols, Jenners, Marks & Spencer, BHS, Debenhams and even Boots.

Tom Campbell, chief executive of Essential Edinburgh, the Capital's business improvement district said: "We have to raise the strongest possible objection to this proposed additional tax.

"These large stores are the lifeblood of the capital city's economy and there appears to be no rationale for their selection other than size of store equates to profitability.

"The businesses in the city centre of Edinburgh pay a one per cent levy on top of their business rates already to the business improvement district company and that is directed back into the city centre.

"The Government should be assisting these retailers who are struggling, not cutting deeper into their ability to trade."

Ron Hewitt, chief executive of Edinburgh Chamber of Commerce, said he was "deeply worried" about the effect if the new tax on city centre stores.

"It would seem inevitable that these prices will be passed on to consumers, which will then be an incentive for people to shop on the internet," he said.

Lothians Tory MSP Gavin Brown said big stores were important sources of employment and he was worried the tax could put jobs at risk.

He said: "If retailers are going to be paying this Scottish-only tax instead of creating jobs, it's a pretty bad outlook."

A Scottish Government spokesman said the new levy would help redress some of the imbalance between profitable large supermarkets, particularly those located in retail parks, and smaller independent retailers in town and city centres.

"For the small number of businesses affected by this measure, business rates typically account for around two per cent of turnover. It is only fair that the largest, profitable businesses make a greater contribution and if this helps sustain businesses in many of our town and city centres then that is an added benefit," he added.

[e-mail]