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Business rates cap announced

Finance Secretary Derek Mackay bowed to mounting pressure over the controversial business rates rises yesterday – promising a 12-month 12.5% cap on any increases for 8,500 firms in the hospitality sector.

The move follows a well-orchestrated campaign by key figures in the trade amid warnings that hotels, pubs, restaurants and cafes faced massive increases in their costs from April and many would struggle to survive.

The 12.5% cap will also apply to 1,000 offices in Aberdeen and Aberdeenshire in recognition of the slump in the North Sea oil sector.

In a statement to Holyrood on Tuesday, Mr Mackay said he had listened and decided to act nationally to tackle the impact of the increase in rateable values. He confirmed that appeals against revaluation would be free in Scotland – unlike in other parts of the UK.

He said, “Although councils retain all the revenue from business rates, and have the power to offer rate reductions, it has become clear that there are some sectors and regions where the increase in rateable values is out of kilter with the wider picture of the revaluation.”

He also pledged early action on the findings of the Barclay Review of Business Rates when it reports in July and said he would work with local authorities to introduce a local rates relief scheme to support key sectors and localities.

Before the announcement, many licensed premises were facing increases that would have seen their rates more than double from April – a much higher rise than other sectors whose rates are calculated differently.

A coalition of the Scottish Tourism Alliance, the British Hospitality Association and the Scottish Licensed Trade Association, which has campaigned for a reversal of the proposed increases, welcomed the move.

A spokesman said, “We know that it will be welcomed by tourism businesses across Scotland, businesses which yesterday were facing serious financial challenges post-April and in many cases, closure and the loss of many jobs. This is hugely encouraging news.”
The coalition meets with Cabinet Secretaries Derek Mackay and Keith Brown this afternoon – watch this space for further updates.

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