SCOTTISH ratepayers face a significant setback as the Scottish Budget reveals an increased multiplier, nearing 60p, imposing a substantial business rates tax burden. Key changes include freezing the poundage for Rateable Values (RV) under £51,000 at 49.8p, but RVs between £51,001 and £100,000 rising to 54.5p and those exceeding £100,000 increasing to 55.9p.
Despite the Small Business Bonus Scheme remaining in place, larger businesses anticipate funding challenges due to a £204 million inflationary hike—the highest in over 30 years. Colliers expresses disappointment in the lack of immediate relief for Scottish retail, leisure, and hospitality sectors, contrasting with support in England and Wales.
The Scottish Budget delivers a blow to businesses with an escalated multiplier, approaching 60p, significantly elevating the business rates tax for Scottish ratepayers. Notable changes include freezing the poundage for Rateable Values (RV) below £51,000 at 49.8p, but RVs ranging from £51,001 to £100,000 witnessing an increase to 54.5p, and properties exceeding £100,000 facing a rise to 55.9p.
While the Small Business Bonus Scheme persists, medium to larger businesses grapple with funding challenges, confronted by a staggering £204 million inflationary surge—the most substantial annual rise in three decades. Colliers expresses disappointment in the absence of immediate relief for the Scottish retail, leisure, and hospitality sectors, a contrast to support seen in England and Wales.
Louise Daly, Head of Business Rates for Colliers in Scotland, welcomes the frozen small poundage but deems the surge in intermediate and higher poundage disappointing. The projected £204 million increase poses a significant burden on medium to larger businesses, marking the most substantial annual rise in over 30 years. While the Small Business Bonus Scheme retention offers solace for small businesses amid rising inflation, interest rates, and energy costs, larger employers are left grappling with the formidable challenge of funding the unprecedented hike.
Addressing the retail, hospitality, and leisure sectors, Daly expresses disappointment, considering it a missed opportunity to provide immediate relief amid the current rates burden. While acknowledging a long-term review approach for targeted solutions and valuation methodology, she asserts the need for effective and timely solutions to alleviate the current challenges within these sectors. In contrast to the UK, where the government extends support for retail, leisure, and hospitality into 2024/25, with a cash cap of £110,000 per business, sectors in Scotland witness less immediate support, highlighting a disparity in budget policies.
Daly underscores the failure of the Scottish Government to recognize the circular economic contribution of businesses in these sectors. The absence of substantial support and the disproportionate tax burden may lead to closures or relocations, potentially resulting in job losses, reduced business rates, lower income tax, and a negative economic impact. The closure rate of pubs in Scotland already outpaces that in England, underscoring the urgency for more robust support from the Scottish Government.
In summary, the Scottish Budget’s impact on businesses raises concerns over the disproportionate tax burden on larger enterprises, highlighting disparities in sectoral support compared to other parts of the UK.