Business groups object to out of town business rates plan

Derek Mackay faces calls to ditch controversial out of town levy
Derek Mackay faces calls to ditch controversial out of town levy
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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 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.

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 that 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.

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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."

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

The Scottish Chambers of Commerce said the proposed scheme risks "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...”

Scottish Engineering added that 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.”

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David Lonsdale, SRC Director, 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. Considering the Barclay reforms are designed to simplify the complicated rates system, this new tax is a half-cocked pistol which risks exploding and undermining the broader and desirable proposed legislation designed to overhaul the rates regime.

"Finance Secretary Derek Mackay should ditch the proposed levy and instead focus on delivering a simpler and more responsive business rates system; something Ministers do have the clear support of the business community for."