Three quarters of Scottish smaller firms opposed to council rates move

Three quarters of Scottish firms believe that giving councils additional powers over non-domestic rates would be bad for business, according to a new survey from the Federation of Small Businesses (FSB).

The poll – conducted over the last month – also shows that seven in 10 businesses are opposed to proposals to give councils additional powers to increase or decrease businesses’ bills. In addition, four in five Scottish businesses are opposed to moves to abolish national rates reliefs, like the Small Business Bonus, even with the option for councils to develop their own replacement schemes.

The survey comes ahead of a crunch Holyrood vote, expected over the next four weeks, where MSPs will debate the final stage of the legislation crucial to the future of Scottish rates system.

At present, the Non-Domestic Rates (Scotland) Bill would see the Small Business Bonus scheme cancelled and powers over the business rate poundage handed to councils. If the Small Business Bonus scheme – a Scotland-wide rate relief – was abolished, some smaller businesses could face a business rate hike of more than £7000.

Andrew McRae, FSB’s Scotland policy chair, said: “At the moment, Scottish smaller businesses face a Frankenstein’s monster of rates changes and the risk of a £7000 tax hike. No wonder then that our survey shows that a clear majority of Scottish firms are opposed to this move.

“Scottish smaller businesses are already facing punishing overheads and an unpredictable economic future. Ending the uniform business rate as well as national rates reliefs risks undermining independent Scottish firms.”

The Scottish Government has signalled their intention to attempt to reverse these amendments at Stage 3, but they will require the support of a number of opposition MSPs.

Andrew McRae said: “The business rates bill going through parliament is mostly sensible, if you excise the ill-considered measures added at Stage 2. Any MSP that supports local independent firms must vote to remove these damaging amendments and return this legislation to reflect its original intentions.”

Only around one in ten firms believe giving new rates powers to councils would have a positive impact on businesses. Similarly only nine per cent of respondents signalled that they would support the end of national reliefs, and only 16 per cent of businesses wanted overall control of bills passed to councils. The remainder of the respondents across all questions signalled they didn’t know.

Business rates generate £2.8 billion for Scottish local authorities.