Businesses in Scotland are set to face a cumulative cost of £180 million over the next three years due to the Scotland-only business rates surcharge, according to the Scottish Retail Consortium (SRC). The surcharge, which was doubled to 2.6p in the pound in April 2016, is set to cost firms occupying medium-sized and larger commercial premises.

The SRC called for parity with England to be restored earlier than the Scottish government's current plan of 2026. As one in six retail premises in Scotland is lying vacant and shopper footfall whilst improving has yet to climb back to pre-pandemic levels, the SRC argued that the surcharge is making life tougher for firms already grappling with a growing cumulative burden of public policy-imposed costs.

The surcharge will be applied to 11,570 commercial and industrial premises, including 2,390 shops. The retail sector alone is liable for £9.1 million of this surcharge each year. Despite some recent changes, the rates burden remains high, and the poundage is at a 24-year high, SRC said in a press release.

David Lonsdale, director of SRC, said: “Scottish Ministers have made some headway on business rates including freezing the headline poundage rate for the coming year and introducing more regular commercial property revaluations.

“However, this makes it all the more striking that restoring parity with England on the higher property rate surtax isn’t being sped up. Indeed, with over two thousand medium-sized and larger shops—and eleven thousand commercial premises overall—continuing to pay a higher business rate than counterparts or competitors down south, this Scotland-only surcharge increasingly sticks out like a sore thumb. The surcharge only serves to make life tougher for retailers by making it more expensive to maintain a shop presence on Scotland’s high streets.”

Fibre2Fashion News Desk (DP)

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