Pressure continues to grow for reform of the business rates system. This week the Scottish Tourism Alliance has joined the growing calls for change. It urges the Scottish government to review the current business rates model with the aim of cutting the level of tax.

Business rates have become the “silent scythe” on Scottish enterprise. Businesses have been forced to stump up ever more money for Holyrood with little publicity given to the growing burden on business.

The money raised by business rates in Scotland has risen by 40 per cent since 2007.

Business rates generated £2.37 billion in 2013-14. The out-turn for 2014-15 is forecast at £2.66 billion and this is reckoned to rise in 2015-16 to £2.84 billion.

Non-domestic rates will become the second largest source of revenue under the control of the Scottish Government after the introduction of the Scottish Rate of Income Tax in April 2016.

The Scottish Tourism Alliance manifesto just published for next year’s Scottish Parliamentary elections sets out how a future Scottish government could support the tourism industry by driving growth and making it more competitive.

It wants the Holyrood administration to minimise the burden of regulation and associated costs by:

  • Reviewing and ultimately reducing the costs (direct and unintended) of regulation on tourism businesses.
  • Ensuring that regulations are interpreted, implemented and enforced in a consistent manner in all parts of the country.
  • Guaranteeing to review the current business rates model with the aim of reducing the level of taxation and give commitment to introduce a fairer system that flexes with the wider economy
  • Continuing to support the Small Business Bonus Scheme.
  • Reducing Planning Application Fees to support and encourage new investment and reinvestment
  • Giving assurance that there will be no further taxation or levy imposed on the visitor at local or national level.
  • Committing to consult with the industry prior to changes to future tourism policy, taxation or planned discussions with UK Government that could negatively affect the competitiveness of the tourism sector in Scotland.

The Alliance wants the government to reduce Air Passenger Duty (ADP) by a minimum of 50 per cent by April 2018 and give assurance that any reduction will not prompt the introduction of another form of tax on tourists or tourism businesses.

It is critical of the slow progress made on improving broadband connectivity, saying that Scotland has the worst 3G coverage in the UK and that a UK government scheme announced in 2011 to improve coverage at 500 sites by May this year has so far only seen around 30 masts being built.

It wants to see a clear timescale to deliver mobile and broadband connectivity throughout Scotland that meets visitor and industry expectations and Holyrood to deliver on the vision of Scotland as ‘a world class digital nation by 2020’

There are 13,480 tourism enterprises in Scotland providing 211,200 jobs. Tourism brought in an estimated £4.4 billion in direct spend from overnight visitors last year, of which £1.7 billion comes from international visitors. The aim is to lift the overall overnight visitor direct spend total by £1 billion by 2020.

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