Comment by Gillian McKenzie
THE sighs of relief across the Scottish trade were virtually audible.
Finance minister Derek Mackay’s announcement – less than six weeks before new rateable values are due to take effect – of a 12.5% cap on business rates rises for hospitality businesses for a year will bring respite for many operators across the country.
Of course any increase is not good, but 12.5% is a damn sight better than the quite frankly ridiculous rateable value hikes (300% in some cases) that have emerged as SLTN has followed the rates revaluation story since last year. I don’t remember speaking to so many operators genuinely concerned for the future of their business since the smoking ban back in 2006.
Unlike the smoking ban, however, business rates sadly didn’t garner much in the way of media coverage until late in the day, by which point the coalition of trade groups – the BHA, SLTA and STA – was well down the road with its lobbying effort.
Of course it’s not over yet.
As operators are all too well aware, the fundamental issue with business rates for the licensed trade is the way in which they are calculated, based on ‘hypothetical achievable turnover’ rather than square footage.
The Barclay group, set up to review the business rates system in Scotland, is due to report to ministers in July, and the lobbying efforts of trade groups for a complete overhaul of the system are continuing.
A 12-month cap on rates rises is all well and good, but it is just that: a year-long hiatus which gets nowhere near the root of the problem.
Reprieve is one thing but it’s reform that is required.