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|FSB: Rate hike would scupper investment and close firms|
|Thursday, 13 October 2016|
Abolishing rates help for smaller Scottish firms would result in thousands of cancelled investments and business closures, new Federation of Small Businesses’ (FSB) research shows.
Ahead of the SNP conference, which kicks off in Glasgow later today, FSB has published a new survey of almost 1,000 business owners. FSB asked recipients of the Small Business Bonus scheme – a rates relief worth up to £4,000 per year – what would happen if the support was abolished.
About a fifth of small firms (18.9%) reported they would close the business, with similar proportions arguing that they would have to cancel investments (19.9%) and amend their plans for growth (18.3%). The scheme has close to 100,000 recipients.
Andy Willox, the FSB’s Scottish policy convenor, said: “The Scottish Government’s Small Business Bonus scheme has helped smaller firms ride out almost a decade of turmoil.
“With Scottish communities and firms now facing yet more economic uncertainty, it is not the time to even consider hiking smaller firms’ bills.”
Asked how they used the savings from the relief, 37 per cent of respondents said they used them to invest in their business, while 35 per cent used the break to offset other cost increases. 19 per cent pointed to investment in their staff.
The survey forms part of the small business campaign group’s submission to the independent review of the business rates system, commissioned by the First Minister and led by Ken Barclay, former chair of RBS in Scotland.
The FSB submission also makes the case for modernising the tax, which they argue would decrease bureaucracy, improve collection rates and lower collection costs.
Further, FSB argues for a new investment allowance, which would introduce a grace period between firms investing in their property and facing an increased rates bill.
Andy Willox said: “The wider Scottish rates system is overcomplicated, old-fashioned and unaccountable. Addressing this shortcoming should be the Barclay review’s key objective.”
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