How’s this for a competitive tax system in Scotland?

England’s business rates supplement for larger firms for the coming financial year (2016-17) which starts next month has now been officially confirmed at 1.3p.

This contrasts with Scotland’s 2.6p supplement for the coming financial year (the Deputy First Minister announced his plans to double it in his Scottish Budget statement at Holyrood on 16 December).

The additional cost to firms operating from medium-sized and larger premises in Scotland will be £60 million a year.

Business opposition is strengthening. Says Scottish Retail Consortium Director David Lonsdale, “Given existing concerns about Scotland’s relative economic underperformance compared to the UK as a whole and the pressing need to lift private sector investment, this tax hike is both odd and troubling.

“The tax rise sits ill at ease with repeated claims from Scottish Ministers to be pursuing the most competitive business rates regime in the UK, and we’ve yet to hear a convincing reason as to why firms operating from medium and larger sized premises in Scotland are better placed to be forking out more in rates than firms in comparable premises elsewhere in the UK.

“Our fear is that this Scotland-only surcharge could open the door to even higher taxes next year if there is another shortfall in projected devolved tax revenues.”

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