Retailers sound the alarm over out-of-town levy plans

Business leaders have branded plans to charge extra business rates on out-of-town shopping centres and online firms in Scotland as ‘alarming’.

Ministers at Holyrood announced earlier this week they are launching a consultation on the recommendations from last year’s Barclay Review, which looked at how to reform Scotland’s business rate system.

One of the recommendations in the original review was to give councils a new discretionary power to impose an additional levy for out-of-town or predominantly online businesses, which could then be used to support firms in town centres.

The Scottish Government’s consultation document, which was published on Monday, suggests a pilot scheme involving no more than three towns.

The Scottish finance minister Derek Mackay said the consultation marks ‘the next step in our reform of the business rates system’.

‘The recommendations of Barclay, alongside others in the Budget strike the right balance between offering a competitive and sustainable taxation environment while delivering sufficient resources to fund the public services which we all rely,’ said Mr Mackay.

‘In April I introduced a number of measures to underpin that competitive advantage. The growth accelerator and 100% relief for new build properties until first occupied will support speculative development and encourage improvements to our building stock, while our new targeted nursery relief will support a sector that is vital to ensuring an inclusive workforce. These measures are unique in the UK and apply equally to the public, private and third sectors.’

But the director of the Scottish Retail Consortium, David Lonsdale said the plans to tax out-of-town and online businesses were ‘alarming’.

‘Despite the Barclay reforms, the overall rates burden remains onerous,’ said Mr Lonsdale.

‘Over and above the headline poundage rate many retailers also already pay the large firms’ business rates supplement and often a Business Improvement District levy on top.

‘This new business rates surcharge is at odds with the Scottish Government’s ambition of delivering a competitive rates regime, and introduces a fresh element of unpredictability into the system.

‘It will do little to aid town centres, since it is not an answer to the high cost of operating on our high streets, nor to the profound shift in consumers shopping habits. The finance secretary should firmly knock this new tax on the head,’ added Mr Lonsdale.