Business chiefs call for '˜unpredictable' out-of-town business tax to be scrapped

More than 30 leading business groups including the CBI and the Scotch Whisky Association have expressed concern about proposals to introduce a new local authority rates levy on out-of-town businesses.

The SRC has renewed its calls for finance secretary Derek Mackay to ditch the proposal. Picture: Lisa Ferguson

The groups have made their reservations known in their responses to a Scottish Government consultation on the controversial proposals.

The Barclay Review of business rates commissioned by Scottish ministers included plans for a number of pilot councils to be given the power to increase rates paid by “out of town” and “predominantly online” businesses.

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The proposal was put forward in an attempt to make it more attractive to do business in towns and regenerate town centres.

But preliminary analysis of consultation responses by the Scottish Retail Consortium (SRC) has found 31 business organisations have expressed reservations about the plan. They include CBI Scotland, the Scotch Whisky Association, the Food and Drink Federation and Scottish Engineering.

The SRC has renewed its calls for finance secretary Derek Mackay to ditch the proposal.

CBI Scotland warned: “An additional levy would in short create more complexity, unpredictability and cost to a wide range of businesses that are already working hard to contribute to their local communities.”

The Federation of Small Businesses said a new levy “could create local divisions”.

And the Scottish Chambers of Commerce said the proposed scheme risked “unfairly punishing those who have opted for specific business models”.

The Scotch Whisky Association said it was “not in favour of an out-of-town additional levy”. “It could disadvantage sites that are based in rural locations or out-of-town centres,” the association said in its submission.

Scottish Engineering added it was “extremely concerned over the proposal to empower all local authorities to levy additional business rates surcharges on out-of-town businesses and we urge the government not to proceed with this aspect of the overall proposals”.

SRC director David Lonsdale said: “A formidable and broad cross-section of Scottish business and industry are voicing serious doubts over the wisdom of progressing with this new tax, which will simply introduce further complexity and cost into the business rates system.

“The questions around the scheme, who would be liable, what the tax rate would be, how long it would apply for and where the revenues would go have mounted as business groups from across Scotland’s economy have considered the government’s proposed new tax.”

A Scottish Government spokesperson said: “The Barclay Review was established to review the current non-domestic rates system to support growth, improve administration and increase fairness. The Scottish Government is committed to delivering the Barclay Review as part of our commitment to maintaining a competitive non-domestic rates regime for businesses in Scotland and we provide the most competitive system of rates relief in the UK.

“The consultation concluded on 17 September and we are currently analysing the responses to inform the delivery of these reforms.”