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Scotland’s retail industry unveils plans for an overhaul of business taxation

LONDON, 2015-8-27— /EPR Retail News/ — Scotland’s retail industry is seeking to concentrate the minds of policy makers and politicians on lifting the country’s economic growth and productivity ahead of the 2016 Holyrood election, through unveiling plans for an overhaul of business taxation.

Launching the first in a series of election policy papers (‘Holyrood 2016: Business Rates’ can be downloaded from the right-hand side), the SRC is setting out a range of measures for the reform of the £2.8 billion business rates tax for inclusion as an early priority in the next Administration’s Programme for Government.

A growing coalition of businesses and representative organisations have recently made the case for the fundamental reform of business rates in Scotland.

The SRC has set out medium and longer term ambitions including the need for a firm commitment to a fundamental structural reform of business rates, including consideration of whether the business rates system should remain a property-based tax.

In addition the SRC has set out a range of short term reforms that are urgently required to arrest the number of store closures, assist town centres, support business investment and protect jobs. These measures include the introduction of more frequent revaluations, a lower retail-specific poundage, empty property relief for premises undergoing investment and refurbishment and a wide range of administrative improvements including standardised online billing and a reduction in the number of Assessors from 14 to 1 into a single National Assessor.

Commenting on the launch of the policy paper, SRC Director David Lonsdale, said:

‘Ahead of the Holyrood election there needs to be a thorough debate about how the next Scottish Administration and Parliament will seek to help raise the country’s rate of economic growth and improve business productivity.

‘Lifting private sector investment will be crucial to achieving this. There is a strong and growing consensus across business and industry in Scotland that the current business rates system is inadequate to the task, out of date, no longer fit for purpose and in serious need of fundamental reform.

‘The system is a tax on jobs and growth, undermining investment in property, especially in town centres and high streets. There is no greater pressing issue for the retail industry in Scotland than the prohibitive burden of business rates, which has moved in the eyes of many retailers from an irritation to mission critical in recent years.

‘This is not just a problem for businesses, store closures have a significant and detrimental impact on communities and town centres and lead to a loss in government revenue through other taxes.

‘That is why we have launched our proposals for reform which are vital for securing a competitive business environment in Scotland.’


Notes to editors:
1. A copy of the ‘Holyrood 2016: Business Rates’ paper can be downloaded from the right-hand side.
2. The Business Rates paper follows a previous publication launched by the SRC, early in 2015, making the detailed case for business rates reform. A copy of Business Rates: Fundamental Reform can be accessed here
3. The retail industry contributes around £2 billion in taxes per year in Scotland across the top five taxes of VAT, income tax, national insurance, business rates and corporation tax. Of the £2 billion, retail contributed close to £700 million in business rates (around a quarter of the total take from business rates) and more than the entire tax contribution from the Oil and Gas sector.
4. Business rates paid by retail in Scotland have increased by 30 per cent between 2009 and 2014. Over that same period these has been 1,800 fewer shops and the vacancy rates is ‘stuck’ at 1 in 10 shops. Every one per cent increase in the vacancy rate equates to a loss of around 2,550 retail jobs in Scotland.
5. In 2005, business rates made up around one-third of all taxes borne by retailers. By 2014 this had grown to nearly 50 per cent.
6. Since 2007 there has been a 42 per cent increase in the revenue derived from business rates but only a seven per cent increase in council tax. However, council tax is under review by an independent government appointed Commission whilst business rates have been largely ignored.
7. A range of businesses and representative groups are supporting the call for reform including the Scottish Chambers of Commerce, RICS, Scottish Property Federation, Association of Town and City Management Scotland, Scotch Whisky Association, Publishing Scotland, Intu Properties, National Federation of Retail News, Scottish Engineering and the Scottish Grocers’ Federation.
8. In November 2014 a poll of MSPs revealed that 69 per cent agreed that the current system of business rates is in need of reform with only nine per cent disagreeing.

For media enquiries please contact David Lonsdale, SRC Director, 07801629088

British Retail Consortium, 21 Dartmouth Street, Westminster, London, SW1H 9BP.
020 7854 8900.

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