THERE is no doubt that business is facing real challenges right now. These are largely driven by wider economic issues, not least Brexit, but we can and are committed to doing everything we can to help.
My Draft Budget proposes a competitive package of measures to reduce business rates revenue across Scotland by £155 million. In particular it gives small and medium enterprises, which are Scotland’s economic engine, the security and confidence to grow in these toughest of economic times.
Loading article content
I am raising the threshold for those who qualify for 100 per cent relief under the scheme, meaning 100,000 properties will pay not rates at all next year and around 9,000 properties will be up to £7,000 a year better off than their equivalents in England.
When I have visited organisations, I have heard first-hand the value this scheme brings to small and medium size enterprises. I recently visited the Mad Hatters Coffee house in Paisley, which is one of the properties which now qualify for 100 per cent relief through the SBBS. Whilst I was there the owner explained to me the difference that SBBS made to them on a day to day basis.
And to many, the Small Business Bonus Scheme really is the difference between employing an extra member of staff; indeed, many rely on it to survive. That is one of the reasons why the Federation of Small Businesses this week said “smaller firms in Scotland benefit from the most helpful reliefs anywhere in the UK”.
Additionally, this year we have increased the threshold for the large business supplement, meaning that 8,000 fewer premises will pay it again, easing the pressure on medium size employers.
Of course, I recognise the need to support the businesses whose property values are increasing. To this end, we will be cutting the tax rate that applies to a property’s rateable value by 3.7 per cent to 46.6 pence in the pound.
And, whilst these actions will be vital to secure the future of many businesses around the country, we must also listen to concerns when they arise. This is why I have engaged, and will continue to engage, with businesses all across Scotland to hear their concerns.’
It is, of course, possible for local relief schemes to be put in place by local authorities. Councils retain all the revenue from business rates and, through our Community Empowerment Act, have the power to offer further rate reductions on top of those funded by the Scottish Government.
Local authorities could use this power to attract new investment into town centres, target specific locations or sectors of their economies or in this case, to alleviate the impact of a revaluation. I welcome Aberdeenshire Council’s plan to utilise that power to support businesses in their area.
I made clear in my budget statement in Parliament earlier this month that local councils will now get an extra £130 million revenue funding, alongside all the other resources at their disposal. This funding is not ring-fenced for any particular purpose, but it could well be used by any council wishing to provide rates relief for local businesses.
Looking forward, an external group has been tasked with reviewing the rates system in Scotland and I look forward to receiving the recommendations of that review this summer.
In the current economic climate, where the weaker pound is already putting significant strain on our economy, we must look for a system to benefit those who most need it, and continue to ensure a fair tax burden.