Larger Scots firms to pay £55m more in rates than English counterparts

Firms occupying larger premises in Scotland are set to pay £54.7 million more in business rates than their counterparts down south in the coming financial year, figures have revealed.

The Scottish Retail Consortium (SRC) criticised the disparity and called on SNP ministers to close the gap with England.

In response to a written parliamentary question from Labour MSP Michael Marra, SNP ministers confirmed the higher property rate differential between Scotland and England will be 1.3p in the pound, costing larger ratepayers an extra £54.7m in 2025/26.

The Scottish Retail Consortium wants SNP ministers to close the gap with England | National World

Shops will account for £9.1m of the surcharge, with hotels paying £2.5m more, offices £6.4m and factories £9.3m. Pubs, cinemas and caravan parks are also affected.

The higher property rate is liable on commercial properties with a rateable value of £100,000. The SRC said there are 11,360 such premises.

David Lonsdale, director of the SRC, said: “There is a pressing need to lift private sector investment here in Scotland yet firms liable for the higher property rate continue to pay more than their counterparts in England, to the tune of £54.7m annually.

“Shops account for £9.1m of this, making it even more expensive to operate a store on our high streets and retail destinations at a time when retail sales and footfall are at best flatlining.

“We’re baffled as to why thousands of stores and other businesses operating here in Scotland are thought to be better placed to fork out more in rates than similar sized premises down south.

“This Scotland-only surcharge increasingly sticks out like a sore thumb. Ministers must stand by their pledge to restore parity with England and commit to a new ambition, a poundage rate lock, so that Scots retailers are never again charged more than their counterparts down south.”

Mr Marra said “It’s clear that Scotland’s business rates system is letting down local businesses and the SNP has made a bad picture worse by failing to pass on rates relief for retail.”

Tory MSP Murdo Fraser said the extra costs “are just the latest burden to hit Scottish businesses as a result of the SNP’s refusal to pass on money for rates relief”.

A Scottish Government spokesperson said: “The Scottish Budget 2025/26 delivers a competitive non-domestic rates regime including a freeze to the basic property rate, delivering the lowest such rate in the UK for the seventh year in a row, and maintaining the lowest property tax rate in the UK for over 95 per cent of non-domestic properties in Scotland.

“The Budget also provides a package of reliefs worth an estimated £731m, including the small business bonus scheme which continues to be the most generous of its kind in the UK. We estimate that around half of the properties in the retail, hospitality and leisure sectors will continue to be eligible for 100 per cent small business bonus scheme relief in 2025/26.

“We recognise the challenging situation the UK Government’s rise in National Insurance presents for Scotland’s retailers.”