Business chiefs got one of the early Christmas presents they were hoping for in the Scottish budget – no change in the poundage for non-domestic rates.
Acting Finance Secretary John Swinney had faced intense lobbying over the poundage rate, which dictates how much firms have to pay in business rates every year.
Smaller premises are either exempt from business rates or qualify for a reduction.
Most other firms pay 49.8p in the pound, although there are two higher rates – 51.1p and 52.4p – for properties which have greater rateable values.
Aberdeen chamber ‘grateful’
Aberdeen and Grampian Chamber of Commerce chief executive Russell Borthwick said: “The chamber and other business organisations have been pressing for business rates to be frozen, so we are grateful that the finance secretary has listened to our concerns.
“This move keeps over £300 million on Scottish balance sheets which can be invested in future growth.”
Scottish Retail Consortium director David Lonsdale said: “Retailers will breathe a sigh of relief at the decision to freeze the business rate.
“Ministers have clearly listened and responded positively to the concerns and representations of the industry, which accounts for 22% of all rates.
Business rates: Why do we have them, who pays and how are they calculated?
“Freezing the business rate means retailers – Scotland’s biggest private-sector employer – avoid a £60m tax hike at a time when they are grappling with spiralling costs and an uncertain outlook.
“This is good news for retailers, for hard-pressed retail destinations and for shoppers as it will ease upwards pressure on store prices.”
Mr Lonsdale added: “The freeze shouldn’t be the limit of the government’s ambition on rates.
“Business rates need recast for the years ahead, beginning with a timetable for returning the poundage to a permanently lower level and faster restoration of the level playing field with England on the higher property rate.”
Freezing the business rate means retailers – Scotland’s biggest private-sector employer – avoid a £60m tax hike at a time when they are grappling with spiralling costs and an uncertain outlook.”
David Lonsdale, director, Scottish Retail Consortium.
Andrew McRae, policy chairman in Scotland for the Federation of Small Businesses, said the decision gave firms much-needed “breathing space” to help deal with spiralling overheads and falling turnovers,
Mr McRae added: “We urged the government to freeze the percentage at which businesses pay their rates, so we’re pleased they’ve listened. This will come as a real relief to hard-pressed ratepayers.
“It’s also good news that those who will see their annual rates bill increase following the recent revaluation will benefit from transitional relief and not face paying all of the increase at once.”
Mr Swinney said he had listened to the lobbying .
The minister added: “Sixteen business organisations came together to ask me to take one particular step to support businesses through these tough times.
“Their No1 ask was that I freeze non-domestic rates poundage at 2022-23 levels.
“On non-domestic rates, I can confirm that we will protect businesses from the full impact of inflation by delivering a freeze to the basic property rate.
Lowest poundage in the UK
“This will ensure Scotland has the lowest poundage in the United Kingdom for the fifth year in a row and is forecast to save business tax rate payers £308m, compared to an inflationary increase.”
North-east firms have long complained they are unfairly treated by a business rates system which left them shouldering much bigger bills, based on rental values from before the impact of the last oil and gas downturn started to be felt across the region.
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