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Shops in Scotland will see their annual business rates bills rise by £31m from next week, the Scottish Retail Consortium announced.
The change follows the decision in the Scottish Government’s Budget to increase the business rate for firms occupying 22,120 medium-sized and larger commercial premises by 6.7% in 2024-25. This is the biggest yearly increase in the business rate since 1999 and is almost double the current rate of inflation.
In response to written parliamentary questions, Scottish Ministers have revealed that the 4,550 shops liable for the Intermediate and Higher Property Rates will see their rates bills rise by a total of £31.2m a year.
The 6.7% increase will take the business rate for these premises to a 25-year high. 2,410 of these stores – liable for the Higher Property Rate – will continue to pay a higher business rate than competitors and counterparts down south.
Pubs and restaurants will see their annual rates bills rise by £2m from 1 April. Meanwhile, hotels, offices, and industrial properties will see increases of £7.8m, £23.5m, and £32.4m respectively.
Separately, the Scottish Budget revealed that Ministers are considering levying a business rate public health surtax on larger grocery stores. If implemented this would likely come on top of the hike in the business rate.
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 £31m extra annually in taxation starting from next week as the business rate spirals to a twenty-five year high.
“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.”
Lonsdale concluded: “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.”
