Government confirms extent of growing rates burden

Scottish Parliament

New official figures have revealed that the headline poundage/tax rate for business rates has reached its highest point since the turn of the decade, with the tax rate up by a fifth over the past nine years.

In response to a written parliamentary question published on the Scottish Parliament website, Scottish Ministers confirmed that the headline poundage/tax rate for business rates will have leapt from 40.7% in 2010-11 to 49% in 2019-20, the new financial year at the start of April. For the 22,011 medium-sized and larger commercial premises (of which 5,065 are retailers) liable for the large business rates supplement, the figures over the same period are 41.4% and 51.6% respectively.

Retail accounts for a fifth of rates paid. The 2019-20 increase in the business rate will add a further £13.2m to retailers’ rates bills in Scotland in the year ahead. It comes at a time when sales are sluggish, shop vacancies stand at 12%, and retailers are burdened with other statutory costs such as employer pension contributions and increasing living wage rates.

David Lonsdale, Director of the Scottish Retail Consortium, said: “It is apparent from the Scottish Budget and new Non-Domestic Rates Bill that headway is being made on rates. However, progress is uneven and the overall burden of business rates remains onerous, at a time when firms are grappling with a hotchpotch of other government-imposed cost rises and with one in every eight shops in our town centres lying vacant.

“The cumulative burden of tax and regulatory costs has mushroomed over recent years and is accelerating the pace of change within the retail industry, as firms seek to reinvent themselves in the face of profound changes in shopping habits.

“What is needed is a medium-term plan to lower the rates burden, coupled with restoration of parity with England on the large firms’ supplement. This would increase retailers’ confidence about investing in new and refurbished shop premises.”