SRC sounds alarm on proposed new business rates

David Lonsdale

The Scottish Retail Consortium (SRC) has called on the Scottish Government to scrap plans to allow councils to levy a new business rates tax on out of town and online businesses.

In its submission to the devolved administration’s Barclay Implementation consultation, the SRC also said it was pleased with 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. It comes ahead of the first anniversary of the publication of the Barclay Rates Review on Wednesday (August 22, 2018).

In a detailed six-page submission sent to the Finance Secretary, the SRC praised the overall progress with implementing Barclay but voiced profound concerns over the proposed new business rates levy.

The trade association said the new tax would add a fresh element of unpredictability and complexity into the rates system, and burden retailers with further cost at the very time they need to invest to compete and to respond to changing shopping habits.

The SRC said that many retailers already stump up for the headline business rate, the large business rate levy, and a Business Improvement District charge, and asked if this new rates levy would be on top. It seeks clarity over how much the new tax would cost firms, how long it would apply for, and what the revenues would specifically be used for.

If the new tax goes ahead the SRC wants to see the following safeguards included:

  • A statutory cap on the amount of the levy to ensure it is not punitive
  • Ratepayers to have a say on how the proceeds are spent
  • Each local authority levy scheme to be time-limited and accompanied by a comprehensive plan to aid town centres

David Lonsdale (pictured), SRC Director, commented: “The SRC has campaigned for a fairer and more flexible rates system which better reflects economic and trading conditions. Several aspects of the government’s proposals should help to do this, in particular the move to three-yearly rates revaluations.

“However, new legislation is only part of the process of instituting a fairer rates system. An important next step, as recommended by the Barclay report, would be an accelerated timetable to bring the large business rates supplement back into parity with the rest of the UK. The overall rates burden continues to be onerous, and is one of the big challenges to retailers operating from property. With shop numbers continuing to fall, action now is essential, both to protect businesses but also government revenue.

“In this context, 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.”