Nicola Sturgeon facing calls to scrap '˜unfair' business rates

Nicola Sturgeon is facing calls to review her business rates policy after retailers and industry representatives objected to the Scottish Government's regime which puts firms at a competitive disadvantage.

Nicola Sturgeon will be urged not to disadvantage Scottish firms. Picture: PA

A report by the Scottish Retail Consortium (SRC) has urged the government to reform business rates and scrap Scotland’s £64.2 million annual large business rates surcharge which affects 29,000 firms.

Business rates generate around £2.8 billion for Scottish local authorities and are based on the rateable value of a property. The main poundage rate has increased to 48.4 pence in the pound.

Companies with a rateable value of more than £35,000 pay the large business supplement, which in Scotland is 2.6p in the pound compared with 1.3p south of the Border.

A new paper on growing the Scottish economy calls for urgent “tangible action” to support retailers and increase consumer confidence after the Brexit vote.

The same demand was also made by Scottish Chambers of Commerce chief executive Liz Cameron, who warned inaction on the business rates supplement was not an option.

Ms Cameron said: “Scotland business rates will be revalued in less than eight months’ time but the values that will apply are based on the economy as it was on 1 April 2015 – over a year before the EU referendum and before the worst effects of persistent low oil prices became apparent.

“If the Scottish Government chooses to do nothing about next year’s rates bills, then businesses will be hit with valuations that bear no relevance to the economic conditions they will be facing next year.”

Shadow economy secretary Dean Lockhart said: “This unfair business tax has instead very severely damaged the business operations of a number of previously successful Scottish high street businesses.”

Last night economy secretary Keith Brown said: “We are determined to maintain competitive business rates for the majority of ratepayers, and have commenced an external review to engage with business and explore how rates can better reflect economic conditions and support growth – we welcome all contributions from businesses to that discussion.”