The latest ONS Consumer Price Index (CPI) figure, published today (September 19), has revealed that inflation in August stood at 2.7%.
If this holds until next month, when the CPI figure is used to calculate the business poundage rate for next year, as is likely to be the case, Scottish retailers could face an extra £18m on their annual business rates bill from April 2019.
Should the Scottish Government not repeat last year’s decision to limit rises to CPI, but instead use RPI (which is currently 3.5%), that £18m figure could rise to over £23m.
The retail industry makes up 6.6% of the economy (Gross Value Added) and pays over a fifth of the business rates bill.
David Lonsdale (pictured), Scottish Retail Consortium (SRC) Director, said it was “ridiculous” to consider further increases to property taxes paid by retailers given the current economic climate.
“Whilst there may be a superficial appeal to squeezing the last penny out of stretched businesses, doing so puts stores at risk, threatening jobs and future tax revenues,” he said.
Calling for a two-year freeze on the poundage in this year’s Scottish Budget, Lonsdale added: “This isn’t about paying less, it is simply not reasonable to continue hiking up bills on struggling businesses. With the retail industry, and indeed the Scottish economy, going through a period of immense change under enormous pressure, this is the time to focus on growth not on further tax rises.”