Insights
- Starting next week, Scottish retail shops will see a £31 million ($39.1 million) hike in business rates for the FY25, as per Scottish Government's budget.
- This 6.7 per cent rise marks the most substantial raise since 1999.
- The BRC highlights that 2,410 shops at the higher property rate will face a competitive disadvantage compared to their UK counterparts.
Retail shops across Scotland are bracing for a significant increase in their annual business rates bills, set to rise by £31 million (approximately $39.1 million) starting next week. This development follows the Scottish Government's recent budget decision to hike the business rate by 6.7 per cent for the financial year 2024-25 (FY25) for firms occupying medium-sized and larger commercial premises, totalling 22,120. Marking the largest annual increase since 1999, this rate adjustment is nearly twice the current rate of inflation, raising concerns among business owners.
In response to written parliamentary questions, Scottish ministers revealed that the 4,550 shops liable for the intermediate and higher property rates will see their rates bills rise by a total of £31.2 million a year. This 6.7 per cent increase propels the business rate for these establishments to a 25-year peak. Particularly, 2,410 stores that are liable for the higher property rate will endure a steeper business rate than their counterparts in other parts of the UK, potentially placing them at a competitive disadvantage, according to the British Retail Consortium (BRC).
David Lonsdale, director of the Scottish Retail Consortium, said: “Scottish retail sales are flatlining, shopper footfall remains below pre-pandemic levels, and the economic outlook is uncertain. Yet despite this, shops in Scotland occupying medium-sized and larger premises are set to fork out a whopping £31 million extra annually in taxation starting from next week as the business rate spirals to a twenty-five-year high.
Starting next week, Scottish retail shops will see a £31 million ($39.1 million) hike in business rates for the FY25, as per Scottish Government's budget.
This 6.7 per cent rise marks the most substantial raise since 1999.
The BRC highlights that 2,410 shops at the higher property rate will face a competitive disadvantage compared to their UK counterparts.
“Public policy is loading new statutory costs onto stores, many of whom underpin the health and viability of Scotland’s high streets and retail destinations. This increases the cost of maintaining stores and serves to make things even trickier for retailers striving to trade profitably and become more productive. The sheer magnitude of this tax hike is starkly at odds with Scottish Government promises to ‘use business rates to boost business’. Things could get worse if ministers press ahead with a new business rate public health surtax on larger grocery stores.”
Fibre2Fashion News Desk (DP)
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