The Barclay review into business rates, commissioned by the Scottish Government alongside research by the Scottish Parliament, highlights how badly business rates will effect Borders businesses.
The Barclay review has been accused of being a missed opportunity for fundamental and radical reform of business rates. It was thought it would move away from a property tax to a tax on profits or turnover, however, this did not materialise. This gives an advantage to large online businesses. It follows a revaluation earlier this year which sent various firms to the brink, with some facing astronomical increases in tax.
Concern was also expressed about proposals to levy rates on sports clubs and council arm’s-length bodies, which hardly tie in with Scottish Government plans to get people more active.
This comes as research by SPICE – the Scottish Parliament Information Centre – shows hospitality businesses in the Borders being disproportionately affected by business rates. These latest figures from 2013-14 show accommodation and food businesses’ rates account for between 14.1% and 16.6% of operating surplus (profits) compared to a national average across all sectors of just 3.5%.
The current cap on rates rises is currently at 15% but this will run out in March. If this is not rectified it could mean many businesses may face closure.
However, the suggestion to bring the large business supplement in line with the rest of the UK has been welcomed, with the Scottish Conservatives having called on this move for some time.
Other proposals to encourage business growth and keep shops in town centres are also worthy inclusions.
John Lamont MP has raised concerns of many local businesses about the rate hikes with the SNP’s Finance Minister. He has also met with the local assessor and with several Borders businesses to discuss this issue. Trade bodies and individual businesses have also made their feelings clear to Rachael Hamilton MSP on this issue.
Rachael Hamilton MSP said: "Although there are a few positives coming from this review, it is, overall, very underwhelming.
"I am especially disappointed by the lack of action for hospitality businesses whom are so vital for the tourism sector, here in the Borders, and across Scotland. This is shown by the research which highlighted the disproportionate burden on hospitality businesses in the Borders.
"I implore the Scottish Government to do the right thing to ensure a fair business rates system is enacted since they are unwilling to fundamentally reform it."
John Lamont MP said: "It is very clear from the many Borders businesses who have contacted me about excessive increases to their business rates that there are widespread concerns about how the current business rates regime operates.
"I had hoped that this review would result in fundamental and radical change but it is now looking like a missed opportunity. Many local businesses will be deeply disappointed.
"The Scottish Government should recognise that local businesses create jobs and vibrant high streets. These businesses are not cash cows to take money from but should be encouraged to invest and grow to help the local economy across the Borders."