Boots hits out at 'outdated and outmoded' business rates system

The business rates system is "simply no longer fit for purpose", the health and beauty retailer Boots has said.

The pharmacy chain said high street firms are disproportionately impacted by the "outdated and outmoded" system and called for taxes to be lowered.

It comes amid warnings Scotland’s high streets have been "irrevocably changed" by the pandemic.

Boots said "well-intentioned" Scottish Government policies such as plans for a deposit return scheme also "risk disproportionately impacting high street retailers and exacerbating the operating cost challenge in retail stores across Scotland".

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It made the comments in evidence submitted to Holyrood's economy and fair work committee, which is holding an inquiry into town centres and retail.

Boots called for "a more consistent and coherent approach to supporting retail growth and competitiveness" in Scotland.

It said: “In addition, it remains the case that the business rates system is simply no longer fit for purpose, with high street retailers disproportionately impacted by this outdated and outmoded system of property-based taxation.

"Large retailers are also subject to the Higher Property supplement which means they face a higher business rate bills in Scotland than on equivalent properties in England, undermining incentives for retailers to invest.

"Lowering the overall business rates burden, bringing the higher rate supplement into parity with England, and using local rates relief powers to support retailers are all key tools to support the recovery and competitiveness of Scottish town centres."

The Scottish Retail Consortium (SRC) said shopper footfall remains 17 per cent below pre-pandemic levels, while shop vacancies have spiked to a six-year high.

It told the committee too many towns and cities “have weak transport infrastructure”, while policies such as the deposit return scheme and the potential introduction of workplace parking levies place “a significant burden on retailers”.

Among other measures, it urged ministers to “restore parity and the level playing field with England” in relation to the Higher Property Rate supplement, which applies to 2,970 retail premises in Scotland, “sooner than is currently planned”.

The SRC said the Scottish Government “should be more ambitious on business rates, with a timetabled route map towards lowering the poundage rate permanently to a more financially sustainable level”.

It said a more “coherent and less piecemeal approach to public policy towards town centres is needed”.

A Scottish Government spokesman said it is “committed to helping business recovery and has provided more than £4.6 billion in support since the beginning of the pandemic, including around £1.6 billion in rates relief”.

He said: “Business support being provided includes a continuation of 50 per cent rates relief for properties in the retail, hospitality and leisure sectors for the first three months of 2022/23, capped at £27,500 per ratepayer.

“The Scottish Government is delivering the lowest non-domestic property rates in the UK for the fourth year in a row for over 95 per cent of non-domestic properties, saving ratepayers £40 million compared to an inflationary increase.

"Action is being taken to support the continued safe return to our town and city centres, and help retailers and communities recover – not least through our £80 million Covid Economic Recovery Fund, our £6 million City Centre Recovery Fund, the recently published Town Centre Action Plan and Retail Strategy.”