Thirty-five leading business representative groups and industry bodies have jointly written to the Scottish Government’s Deputy First Minister and Finance Secretary asking her to freeze the business rate in the coming financial year.
The 35 organisations represent a broad cross section of Scottish industry and commerce, including retailers, wholesalers, manufacturers, tourism, leisure, and commercial property.
The collective call comes ahead of the unveiling of the Scottish Government’s Budget on 19 December, which is expected to set the business rate and associated reliefs and thresholds for the 2024-25 financial year.
Business rates at 24-year high
Scotland’s business rate is already at a 24-year high and a fifth higher than at the start of the previous decade. If increased in line with current CPI inflation this could see ratepayers across Scotland face an extra £205 million on their rates bills from next Spring.
This would be at odds with the Scottish Government’s recently stated aim to use business rates to “boost business”.
The joint letter from the business representative and trade bodies was submitted to Shona Robison MSP, the Scottish Government’s Finance Secretary, on 2 November.
Dear Deputy First Minister,
We are writing jointly ahead of the Scottish Budget to ask that you do not increase the poundage rate in the coming financial year.
We fully recognise that the Scottish Government, like business, is facing its own costs and inflationary pressures at the present time. The work to improve the administration of the rates system through the New Deal for Business is encouraging, as is the headway made in recent years on broader aspects of reform including more frequent revaluations, the retention of the uniform business rate, and the pledge to restore parity on the higher property rate with England which should benefit 11,650 commercial premises here in Scotland.
Yet, after three and a half turbulent years of the pandemic and costs crunch the fact is trading conditions remain challenging, the cost of doing business remains elevated, and the near-term economic outlook is weak. We therefore ask that Scottish Ministers prioritise a freeze in the headline business rate poundage – which is already at a 24-year high – in the coming financial year. This would aid firms with the costs crunch, help them keep down prices for customers, and support business investment and competitiveness.
Our organisations have a range of ideas on how Scotland’s rates system could be improved. However, we collectively believe this practical measure to freeze the business rate requires to be taken in your upcoming Scottish Budget, which would be a positive step applicable to all commercial premises, help ease the burden at this difficult time, and support our shared objective of delivering more sustainable economic growth.
