Retailers ask for help on rates and tax

The Scottish Retail Consortium (SRC) has called on the Scottish Government to scrap the annual £62.4 million large business rates surcharge in a detailed submission ahead of the expected publication this autumn of Holyrood’s spending and taxation plans.

With a number of recommendations, the SRC has urged the Scottish Government to put competitiveness and productivity at the heart of its budget and spending review which is expected next month.

The SRC said the retail industry is Scotland’s largest private sector employer, providing 253,000 jobs.

The SRC also urged Holyrood keep a “firm grip” on personal tax rates and re-evaluate whether current plans for increases in personal taxation in 2017-18 “remain sensible” — and press ahead with fundamental reform of business rates.

In a new paper “Open for Business: Growing a more productive and competitive Scottish economy” submitted to the Scottish Finance Secretary, the SRC highlights the “profound changes” affecting retail and puts forward detailed policy recommendations across key areas including business rates, income tax, council tax, business taxation, apprenticeship levy, charges, regulation and infrastructure.

The SRC said that with the devolution of further new powers, along with the uncertainty following the Brexit vote, the SRC believes there is an urgent need for the Scottish Government to take “tangible action” to support the retail sector and consumer confidence.

David Lonsdale, director of the Scottish Retail Consortium, said: “The retail industry was going through an unprecedented period of transition before the vote to leave the EU.

“With that added uncertainty, the Scottish retail industry faces significant challenges.

“The SRC shares the devolved administration’s aim of making Scotland the most competitive part of the UK to do business, however that goal has yet to be achieved.

“This is why we want to see a bold and ambitious Budget with Scottish Ministers using their powers to significantly improve the Scottish economy.

“In particular, the powers over personal taxation can have an immense impact on the health of Scottish retailers.

“That’s why we argue now is not the time to raise taxes on the vast majority of working Scots, which would of course impact on their discretionary spending.

“However, the Scottish Government should go further and look to reduce the burdens on retailers so they are at the very least no more onerous than elsewhere in the UK.

“That means scrapping the unfair Scotland-only large business rates surcharge, working with firms to ensure they directly benefit from the Apprenticeship Levy monies, and developing a joint government/industry retail strategy to support small, medium and large retailers across the country.

“The Scottish Government is rightly concerned about the potential economic impact of the Brexit vote on Scotland.

“However, they have the powers at hand right now to do more to encourage growth and promote productivity in Scotland.

“With half of VAT receipts being assigned to the Scottish Parliament our politicians at Holyrood have a direct stake in facilitating a flourishing retail industry.

“Retailers will be looking to the Finance Secretary to act when he brings forward his Budget later this year.”

The SRC said it is recommending that Scottish Ministers:

  • Work with the industry to deliver a retail strategy which sets out a clear road-map for future tax and regulatory changes for the decade ahead
  • Bolster consumer confidence by keeping a firm grip on personal tax rates, and re-evaluate whether the current plans for increases in personal taxation in 2017-18 remain sensible
  • Press ahead with fundamental reform of business rates so that a modernised, sustainable, strategically coherent and competitive rates system can be in place shortly after the Barclay Review reports
  • Scrap the £62.4 million annual ‘Large Business Rates Surcharge’ which affects 29,000 firms, and restore poundage rate parity with England
  • Ensure firms in Scotland which pay the Apprenticeship Levy directly benefit from it
  • Shelve the mooted Scotland-only deposit return scheme for drinks containers, a ‘bottle tax’ which would push up prices for consumers