Four of the leading industry groups in Scotland have joined together in order to challenge the Scottish Government on the planned future increases to business rates. The four industry groups represent manufacturing, commercial property, retail and tourism. The groups all feel that business rates should to increase by more than the CPI as opposed to the previously planned RPI measure of inflation. It is thought that this change from the RPI to CPI index has been supported by the Barclays Rates Review which was published recently.
Following the announcement of the UK Autumn budget last week, this switch is being implemented in England from next Spring. Because of this, if Scotland continue to have their business rates aligned to RPI as opposed to CPI, the country will find themselves at a competitive disadvantage compared to companies operating in England. Historically the playing field between Scotland and England in terms of the headline business rate poundage has remained level. Therefore, the disadvantage that has been predicted next year could see Scottish businesses losing out on around £25-30 million next year alone.
Scottish companies operating from medium or larger premise already have to pay more than they would have to in similar premises in England, and this costs them £62 million each year. This difference in rates have come because of the doubling of the Large Business Rates Supplement. The four different business groups that have come forward to dispute these plans are Scottish Engineering, Scottish Property Federation, Scottish Retail Consortium and Scottish Tourism Alliance. These groups have spoken ahead of the Scottish Government’s Budget, expected on the 14th December.
The Scottish Budget offers the perfect opportunity for the Government to set a better, more sustainable path for supporting business across all industries including manufacturing, which will be a vital area to be nurtured as Brexit negotiations progress.