Pandemic property changes could result in higher rates bills

Andrew McRae
Andrew McRae, FSB Scotland's policy chair

SCOTTISH businesses that have adapted their property to comply with public health guidance could end up paying more in business rates, the Federation of Small Businesses (FSB) has warned.

The FSB wants Ministers to say how they’ll address this problem when the Scottish Government outlines their forthcoming legislative programme next week. Further, the small business campaign group has urged Ministers to adjust the timetable of the next rates revaluation to avoid firms’ bills being based on property valuations at spring of this year. FSB has written to the Scottish Government about the issue.

Andrew McRae, FSB’s Scotland policy chair, said: “It is our understanding that some businesses that have adapted their properties to allow them to re-open or keep trading during the pandemic may eventually have to pay higher rates bills as a consequence, owing to expanded or upgraded trading space. Needless to say, we do not believe that firms that have developed solutions to comply with public health advice should be penalised.

“While there are a variety of valuable reliefs in place for smaller firms, we want to hear from Ministers next week how they intend to address this problem We also want the Scottish Government to outline a new timetable for the next revaluation, because we can’t have future rates bills based on pre-crisis property values.”

In addition, FSB wants to hear from Ministers how they intend to give more public contracts to small local businesses. In response to the Advisory Group on Economic Recovery, the Scottish Government has committed to helping local smaller firms win public work.

Scotland’s micro businesses (firms with fewer than 10 employees) receive only 7 per cent of public contracts by value though they account for 93 per cent of Scottish businesses, a figure that has remained stable over the last ten years. The devolved public sector spends around £12 billion a year on goods and services. The number of smaller firms which supply their local authority fell from 51,312 in 2008 to 29,910 in 2017.

Andrew McRae said: “Years of public procurement reforms haven’t delivered for Scotland’s small business community. In fact, it is a scandal that the number of businesses winning work from their council has declined dramatically over the last 15 years.

“While we welcomed the Scottish Government’s commitment to addressing this problem, we now need to understand their plan of action. If we’re going to rebuild our economy after this crisis, there’s no room for warm words and fuzzy commitments. Ministers should start with targets for all public bodies to increase their share of spending with the smallest local businesses.”

FSB wants the devolved public sector to increase the share it spends with micro-businesses by one per cent a year.

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