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Retail chiefs warn over 30% rise in shops' business rates

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The Scottish Retail Consortium said draft valuations for the new rates indicate total rates bills "could leap by over 30%" for premises in and around Edinburgh

The Scottish Retail Consortium said draft valuations for the new rates indicate total rates bills "could leap by over 30%" for premises in and around Edinburgh

The Scottish Retail Consortium said draft valuations for the new rates indicate total rates bills "could leap by over 30%" for premises in and around Edinburgh

Shops in some parts of Scotland are facing business rate hikes of more than 30%, a trade industry body has warned.

The Scottish Retail Consortium (SRC) said draft valuations for the new rates, which are set to change next year, indicate total rates bills "could leap by over 30%" for premises in and around Edinburgh and warned that firms were increasingly moving online due to policy decisions driving up costs.

The SRC revealed in a written submission to Holyrood's Economy, Jobs and Fair Work Committee's draft budget inquiry that the valuations were causing "growing alarm" and accused Finance Secretary Derek Mackay of making the rates system more complex.

The review of property values will be the first since 2010 and the SRC said it will have different impacts depending on the area and part of the economy.

The consortium said: "For example, we are already hearing early indications and growing alarm from some members that, as a result of the draft valuations which have just been published, that their total rates bills could leap by over 30% for those premises operating in and around Edinburgh."

The submission continues: "The Finance Secretary appears to be adding further complexity to the existing rates system with promises of further reliefs for rural areas.

"As we highlighted in our submission to the Barclay Review, the current rates system is opaque, unwieldy and only seems to function through myriad exemptions and reliefs that continue to grow as an overall proportion of the total income from business rates.

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"We question how sustainable this is and how effective it will be, as the local discretionary rates relief introduced last year has only been used by one out of the 32 local authorities.

"Whilst we recognise the Finance Secretary is somewhat limited by the available levers on business taxation, this continued complexity will only deepen unless fundamental reform of the rates system occurs."

The SRC added: "As public policy continues to drive up labour and property costs, retailers are looking ever more closely at shifting their investment towards their online presence, especially given falling technology costs and greater digital capability.

"Ultimately this could mean less rates revenues for government, as we have seen with the 1,700 shop closures over the past seven years."

The SRC praised Mr Mackay for extending the small business bonus scheme of rates relief for smaller firms but accused the Government of "fumbling the opportunity" to cut large business supplement, paid by any business premises with a rateable value of more than £35,000.

A Scottish Government spokesman said: "The Scottish Government announced a package of action to reduce business rates as part of the b udget.

"The small business bonus scheme will be expanded from 2017 to lift 100,000 properties out of rates completely, 8,000 business properties will no longer pay the large business supplement and the overall business rates poundage - the core tax rate that applies to the rateable value of business properties - will be cut by 3.7% to 46.6p."


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