Tax plan to target online retail giants is '˜ill considered and poorly timed'

Proposed taxes for out-of-town and online businesses should be axed, retail have chiefs have warned.

Proposed taxes for out-of-town and online businesses should be axed, retail have chiefs have warned. Picture: Jane Barlow.

They say further tax hikes – as part of new powers earmarked for councils – would ramp up costs and thwart investment at a time when many retailers are struggling and need support from government.

The prospect of a crackdown was set out in the recent Barclay review of business taxation in Scotland and ministers are poised to back a roll-out in three council areas.

It has been backed by many who say it will help breathe life into ailing high streets and make online giants such as Amazon pay their way.

But the Scottish Retail Consortium has warned the new tax would add “unpredictability and complexity” to the rates system, and mean further costs as major names such as House of Fraser and Homebase face a battle for survival as shopping habits change.

SRC director David Lonsdale said: “The ill-considered and poorly timed proposals for an out-of-town rates levy are an unnecessary distraction.

“We have long argued the rates system is already too complicated and too expensive.

“Adding an additional tax, on what at this stage appear arbitrary geographical considerations, will do nothing to help struggling town centres.

“Instead, government need to look strategically at both high streets and the retail industry to understand what the right mix is for different communities.”

If ministers press ahead with the new tax, there must be a legal cap and it should time-limited, according to Mr Lonsdale.

A Scottish Government spokesman said the rates set out in a consultation would be “modest.”

He added: “The proceeds from this supplement would be used to support rates relief for businesses in town centres and we are consulting on a range of appropriate safeguards, such as the need for consultation with all rate-payers who might potentially be affected.”

The progress being made to implement the Barclay agenda and the promise of legislation to deliver on SRC priorities such as more frequent rates revaluations was welcomed by Mr Lonsdale.

“The SRC has campaigned for a fairer and more flexible rates system which better reflects economic and trading conditions,” he said.

“Several aspects of the government’s proposals should help to do this, in particular the move to three-yearly rates revaluations.”