BUSINESS rates policy is not exactly the kind of topic that gets pulses racing.
But the role it can play in determining the fortunes of companies should not be underestimated, given the considerable amount they pay in this tax in return for public services each year. And all the more so when businesses are dealing with the biggest cost crisis in decades.
The subject has commanded plenty of headlines on the business pages in recent weeks and to a large extent this is because of the different approach that is currently taken by the Scottish Government compared with its counterpart in Westminster.
In England and Wales, firms in the retail, hospitality, and leisure sectors are entitled to 75 per cent relief from rates – up to a maximum of £110,00 per business – over the 2023/24 financial year, to help them get back on their feet following the upheaval sparked by the pandemic.
That the same relief has not been provided by Scottish ministers has become a source of growing frustration to firms in Scotland, particularly in recent months as the inflation crisis has undermined their ability to recover from Covid.
The situation is perfectly illustrated by Karen Forret, owner of the Wilkies clothing retailer, who told The Herald recently that she was having to pay around £7,700 more in rates for her store in North Berwick compared with her shop in Berwick-upon-Tweed – even though the two properties have the same rateable value – because the same support is not being provided in Scotland.
The Wilkies case has now been seized upon by a variety of trade groups representing the retail, hospitality, and leisure sectors, which have written jointly to the Cabinet Secretary for Finance, Shona Robison, calling for “similar assistance” to be given.
The case submitted by the groups, which between them speak for tens of thousands of businesses in Scotland, is a strong one. It is certainly hard not to sympathise with the owners of firms who have found their ability to get back on track after the pandemic severely constrained by the inflation crisis of recent months.
But as ever when it comes to subjects as complex as business rates, the matter is far from straight forward.
The Scottish Government points out that it offers relief from business rates in different ways, particularly for smaller firms, noting that its current support package is worth around £744 million. It said its measures will ensure around half of firms in the retail, hospitality, and leisure sectors will not pay rates in the current year because of “the most generous small business relief in the UK”.
While such support can certainly not be dismissed, it is understandably galling for businesses in retail, hospitality, and leisure to see their counterparts in England save thousands of pounds per year when they are paying the full amount in rates – especially after months of soaring costs.
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