Retailers have urged Scottish ministers to shelve considerations for a “cash grab” tax on grocery stores selling alcohol or tobacco.
The Scottish Government’s 2024-25 budget documents revealed plans to “explore” a new business rate surtax on retail premises to help plug the gap in public finances.
Retail leaders previously warned the proposals could lead to stores needing to raise an additional £1 billion in sales each year to cover the cost, coupled with continued pressure on the industry following the pandemic.
The tax proposals – similar to the public health supplement introduced in 2012 – would see retailers pay extra if they sold alcohol or tobacco from their premises.
The previous scheme raised £95 million before it ended in 2015. Now, the Union of Shop, Distributive and Allied Workers (Usdaw) has joined forced with the Scottish Retail Consortium (SRC) to demand ministers reject the plans.
The union said the move would be a “retrograde step” which would break pledges set out in the Scottish Government’s New Deal for Business framework.
Tracy Gilbert, Usdaw Scotland’s regional secretary, said: “The Scottish Government should be making it as easy as possible for retailers to invest and create good jobs in Scotland, not making it more difficult with the threat of a costly new business rate surtax.
“This arbitrary move could exacerbate the challenges facing retail. It could well have significant unintended consequences particularly if it impacted on the amount available to retailers to invest in training budgets or colleague bonuses.”
David Lonsdale, director of the SRC, said: “Usdaw’s intervention shows that a growing range of voices from across Scotland’s retail industry are expressing serious doubts about the wisdom of introducing a new tax on food retailers.
“A new surtax would be a retrograde step and firmly as odds with the Government’s New Deal for Business.
“Grocers already face a swathe of upcoming new regulations and have also been lumbered with huge costs as a result of the deposit return scheme farrago.
“Now they face an additional tax which even the Scottish Government admits is little more than a cash grab. We hope ministers take heed and shelve the surtax.”
A Scottish Government spokesman said: “This announcement in the Scottish budget signalled ministers’ intention to explore the reintroduction of a public health supplement in advance of the next Scottish budget.
“Representatives from the retail sector and other relevant stakeholders will be consulted as part of that exploratory work.
“The Scottish Government is committed to ensuring that engagement with the New Deal for Business Non-Domestic Rates sub-group continues to explore how the non-domestic rates system can best support business growth, investment and competitiveness, while acknowledging the important role income from non-domestic rates plays in funding public services.”