Retailers hit out over Swinney’s ‘double tax’ blow

LARGE retailers in Scotland claim they will be hit with a double tax burden from April following the emergence of another “unjust” strand to finance minister John Swinney’s “health levy”.

Large businesses will continue to pay a business rates supplement that funds the Government’s Small Business Bonus Scheme despite the addition of the £110 million “son of Tesco tax”.

Under previous proposals set out by Swinney last year, larger retailers would not have had to meet the 0.7p supplement in addition to the first Tesco tax that was defeated by Parliament this year.

Although CBI Scotland has calculated that the 0.7p supplement will only amount to £6m over the course of three years, the business group argues the significance of the extra burden is important as it reinforces the impression to big retailers that they will be used as a cash cow by the majority SNP Government.

David Lonsdale, assistant director of CBI Scotland, said: “This latest revelation demonstrates the Scottish Government’s determination to reap as much revenue as possible from the tax rises on businesses which it unveiled last month.

“We are deeply concerned that the tax rises being planned will make it more expensive to invest in Scotland and could put at risk much needed new commercial investment, as larger retailers often have a choice of locations elsewhere in the UK, or indeed abroad, for their investments and will rigorously evaluate post-tax returns on their investment options.”

There was outcry following a meeting between business groups, led by the Scottish Retail Consortium, and the Finance Minister last week when it was revealed that the money raised through the health levy would go direct to local authorities who would be free to spend it how they saw fit.

The revelation led to accusations that the Government was using firms such as Tesco, Sainsbury’s, Asda, Morrisons and Waitrose as a cash cow to fill a hole in the local authority budget.

CBI Scotland is continuing to press for a full consultation on the tax on large vendors of alcohol and tobacco, which was introduced in last month’s Scottish budget.

Business leaders have pointed out that former enterprise minister Jim Mather made a commitment in 2009 to carry out a business impact assessment before introducing new pieces of legislation. Mather told the Parliament’s economy, energy and tourism committee on 11 March 2009 that a move towards business impact assessments was “certainly our [the Government’s] direction of travel”.

A Scottish Government spokesman said: “The public health levy will only affect a small number of the very largest retailers in Scotland. We estimate the levy will raise £30 million in 2012-13 – just 0.1 per cent of retail turnover in Scotland. The draft budget is a consultation document and we welcome all contributions on these proposals and will continue our engagement with retailers on taking our plans forward.”