by David Lonsdale
Assistant Director, CBI Scotland
Scottish firms stump up £2.4 billion each year in non-domestic rates, money which contributes to the funding of local authorities.
There are of course plenty of other charges and levies that companies have to pay to councils for services, for example fees for submitting a planning application have leapt by 20% this year. However the tax paid in business rates remains substantial and is a key economic lever.
The Scottish Government is sensibly reviewing the business rates system at the moment, in order to improve its efficiency and effectiveness as well as its contribution to economic growth. The results are likely to be known later this year.
On behalf of our members, the CBI is arguing principally for two fundamental priorities: more predictability and certainty to be built into the rates system; and for a moratorium on any new or 
additional business rate rises during the remainder of the current parliamentary term, which runs to 2016.
High business rates can be a barrier to commercial investment, growth and cash flow. Government can assist the economic recovery by keeping a firm lid on the amounts charged, and the current Scottish administration has done well to retain parity with the poundage rate that applies in England. After all, we do not want Scotland to be a more expensive and less attractive place to invest and do business than the rest of the UK.
While the current Scottish Government can claim credit on some elements of business rates policy, including the main poundage rate and small firms relief, there have still been too many instances of costly new tax rises or rates levies being introduced. The larger retailers levy introduced last year and next month’s rates rise on firms with empty commercial premises will increase the tax take by £131 million during the 3-year period of the current spending review, yet neither was mentioned in the governing party’s last manifesto. Indeed, the retail levy handicaps Scottish stores, who often have to compete with other parts of their business in the UK or overseas for increasingly mobile capital.
This ad hoc introduction of new or additional business taxes has been an unwelcome characteristic of the approach taken by Scottish Ministers over the past 18 months. It lies behind the CBI’s call for a moratorium on any new or extra business rate taxes during the remainder of the current parliamentary term.