FINANCE Secretary Derek Mackay has stripped Donald Trump’s Scottish business of a lucrative tax break.
The US president's luxury golf resort, Trump Turnberry, this year got more than £100,000 in business rates relief from the Scottish taxpayer. However, the SNP government has now changed the rules and called a halt to such rebates.
It is understood that the Scottish government's move was taken with the Trump business in mind.
The exact cost to Trump from the change is unclear. While Trump clawed back nearly £110,000 this year from tax-payers, a Scottish government source estimated it could be around £20,000 in other years.
In a little-known part of his recent budget, Mackay announced that help would be restricted to properties with a rateable value of up to £1.5 million.
However, Trump Turnberry, which boasts a luxury hotel and golf complex on the Ayrshire coast, will no longer be eligible for support as it has a rateable value of £1.6m.
The SNP administration has a poor relationship with the right-wing president. Re-writing the eligibility criteria around business rates relief will be seen as an intentional rebuke to Trump.
The Scottish Government came under fire earlier this year after businesses complained about massive increases in their rates, a tax levied on non-domestic properties.
Mackay introduced an emergency scheme that limited rises for thousands of businesses, including bed and breakfasts, hotels, pubs, restaurants and timeshare accommodation.
Qualification for assistance was based on the purpose of the property, rather than on turnover or profitability.
However, against a backdrop of tight public finances, it emerged earlier this year that Trump Turnberry had received “transitional” relief worth £109,530 from the scheme. Trump's other Scottish property, a golf club in Aberdeenshire, does not qualify for the rebate.
When the Trump tax break was revealed, Green MSP Patrick Harvie said: “It’s bad enough that he has a business presence in Scotland. It’s galling to learn that the public purse is giving him a helping hand.”
Martin Ford, a councillor in Aberdeenshire and long-standing Trump critic, also weighed in at the time. “Absolutely no-one would think that the best use of nearly £110,000 of public money is to use it to enhance Mr Trump’s bank balance. He clearly doesn’t need it,” he said.
In his December draft budget, Mackay announced that the Government would continue with the transitional arrangements, but said it would no longer apply to the “very largest hospitality properties”.
He said “further details” would be set out in a local government finance circular that is available on the Government website. The document states that relief is limited to properties “with a rateable value up to £1.5 million”.
According to the Scottish Assessors Association, Trump Turnberry has a rateable value of £1,650,000 – a fraction above the cut off point.
It is understood government ministers saw the Turnberry tax relief as a contributory factor to the change in rules.
A Scottish Government source said: “Companies like the Trump Organisation are well able to manage – and these changes mean the budget is prioritising support for smaller firms which most need help in tough economic conditions.”
The eligibility change will inevitably rekindle a feud between Trump and the Scottish Government that dates to when Alex Salmond was First Minister.
The pair initially had a cordial relationship over the tycoon’s golf course in Aberdeenshire, but the Republican politician became enraged over plans for an offshore wind farm nearby.
In one attack, Trump said Scotland was committing "financial suicide" by creating a "wind farm landscape" which he claimed would kill-off tourism.
He told Salmond: "Your country will become a third world wasteland that global investors will avoid."
Relations worsened after Trump realised the Scottish Government would not cave in on the wind farm row.
Salmond then described him as a “man child” and wrote: “In the course of a single phone call, he would veer alarmingly from bonhomie, to bullying, to pleading and then back to a jocular mood. Emotionally he is a Peter Pan – the boy who never grew up.”
The Turnberry luxury golf resort, which has staged the British Open golf championship four times, was bought for £34m in 2014 and renamed by Trump. Although his son Eric runs the business, the President is the ultimate owner.
The firm behind the business, Golf Recreation Scotland Limited, recorded turnover of £8.9m in 2016, but posted an overall loss.
Trump’s Turnberry course was favourite to host the Open in 2021 or 2022, but after his remarks about Muslims in late 2015, the R&A let it be known that Turnberry would not be considered.
Harvie said: “I don’t think anyone will lose any sleep over Donald Trump’s business. His brand is toxic and Scotland is better off without any association with him or his businesses. Tax relief should go to folk who really need it.”
Trump Turnberry did not provide comment.
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