INDUSTRY leaders and politicians are uniting to call for controversial new business rates to be shelved.
Ahead of a summit with the Scottish Government, business figures again warned that failing to put the brakes on the proposed changes would tip many in the hospitality sector over the edge.
Groups including Glasgow Chamber of Commerce, the Scottish Tourism Association, Scottish Licensed Trade Association and Glasgow Restaurant Association also urged all businesses to appeal against hiked up rates.
A rates freeze would mean severely affected businesses would continue to pay their current rates but would withhold the additional cash until a review is published in July.
Led by former Royal Bank of Scotland heavyweight Ken Barclay, the review is expected to report its findings in the summer but there are fears this will come too late for many businesses, with the new rates are due to take effect on April 1.
The bids to halt the move come as the head of the CBI in Scotland called on the Scottish Government to see how it can fast-track rates reform in the near-term.
CBI Scotland director Hugh Aitken said: “For many businesses across Scotland increases in rates are simply unsustainable which is why it is unfortunate that changes haven’t been implemented in tandem with Ken Barclay’s system-wide review this summer.
“If the tax system in Scotland is not competitive we risk undermining the very foundations for economic growth while reducing the revenue receipts that the government needs to invest in services and infrastructure.
The rates increase comes after thousands of outlets saw their
property values soar in the latest valuation of non-domestic property in Scotland, in some cases by as much as 400 per cent.
It means business owners will have to pay thousands of pounds more per year for council services, sparking fears that hundreds will simply be unable to afford the new bills.
Next week senior figures from the Glasgow business world will meet with Finance Secretary Derek Mackay and Economy Secretary Keith Brown and will express their concerns that licensed premises are subject to a different assessment method for determining rates than other sectors, with a major focus on turnover.
Stuart Patrick, chief executive of Glasgow Chamber of Commerce said: “We are calling for a complete freeze on business rates for the licensed trade.
“All we are asking for is a level playing field which doesn’t pose further challenges for such an important industry, especially at a time when the city has launched a masterplan to attract one million more visitors by 2023.”
Scottish Liberal Democrats leader Willie Rennie added his voice to calls for a freeze.
He said: “A moratorium until the recommendations of the Barclay review come out is the right thing
to do.
“To inflict such damaging hikes in rates before you have even listened to the experts is reckless.”
Scottish Conservative finance spokesman Murdo Fraser said: “We are happy for the Scottish Government to look at anything which helps this situation.
“Businesses across Scotland are looking for solutions, and now the SNP has a duty to find those solutions.”
David Watt, executive director of the Institute of Directors Scotland, added: “Businesses all over
Scotland have been horrified at the rigid approach to rates and now is the time for the powers that be to step back and come up with a fairer solution that reflects the climate in which businesses are operating today.”
Finance Secretary Derek Mackay said: “We have engaged directly with business and retail groups, and responded to their concerns – which is why the draft budget recognises the business rates revaluation and proposes a competitive package of measures to reduce rates across Scotland by £155 million.
"This is giving small and medium enterprises the security and confidence to grow in tough economic times. An external review led by Ken Barclay is exploring how business rates might better reflect economic conditions and support investment and growth. Ministers will respond swiftly when that review concludes this summer.
“Next year, across Scotland, more than half of premises will pay no rates, 70% will pay either no or less rates than they do currently and the total package of reliefs we are offering will increase to more than £600 million. Additionally, this year we have increased the threshold for the large business supplement, meaning that 8,000 fewer premises will pay it.”
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