Scotland’s premier business lobby CBI SCOTLAND has joined the growing chorus of calls for a radical reform of business rates. Its manifesto for the 2016 Holyrood election, calls among other things, for an ‘overhaul’ of Scotland’s system of business rates.
Only last week the Scottish Tourism Alliance published its manifesto (available on its website) which called for a ‘review’ of Scottish business rates so that it leads to a ‘reduced level of taxation’.
And today the FEDERATION OF SMALL BUSINESSES SCOTLAND is also to throw its weight behind reform of business rates.
It is calling for as government review and the exemption of micro firms from the business levy. But it has reserved judgement on calls for control over rates to be devolved to local authorities as members are unconvinced of the merits of such a move.
Widespread criticism of the current system in England prompted the UK government to launch a review of non-domestic rates earlier this year and separately the chancellor last week committed to devolving power for business rates to local authorities.
The CBI manifesto warns that unless the next Scottish government ensures its business rates are competitive with the rest of the UK, it risks losing its reputation as “a great place to do business.”
But the problem with both the CBI Scotland and FSB manifestos is that they are unspecific on the detail of the reform they would like to see. And many larger firms fear that they will be obliged to pick up the cost of any exemption from rates of micro businesses.
As for devolution of control of business rates to local authorities, a major problem would be to ensure that poorer local authorities lose out while richer ones take the opportunity to cut rates and attract more business, deepening the plight of less prosperous areas.
Back in August the Scottish Retail Consortium published ‘Holyrood 2016: Business Rates’ – calling for fundamental reform of business rates, seeking a system that flexes with economic conditions and delivers a reduced burden of taxation.
In February the SRC published ‘Business Rates: Fundamental Reform’ in which it highlighted independent research showing that 69 per cent of MSPs agreed that the current system of business rates is in need of reform, with 58 per cent agreeing that a reduction would stimulate business growth.
Said SRC Director David Lonsdale, “Fundamental reform of Scotland’s business rates system is attracting growing support. It is no longer an option to say that fundamental reform is too difficult or complicated – that particular ship has sailed. The challenge for politicians is to show us all how they are going to embrace the task of reform and deliver, with us, a remodeled system that is fit for the decades ahead.”