Levy will ease rates inequality

Retailers rage as government proposes ‘son of Tesco tax’

PLANS by the Scottish Government to hit the country’s biggest alcohol and tobacco retailers with a public health levy will go some way to addressing the “inequality” of the business rates system, a major on-trade group claimed last week.
Finance minister John Swinney sparked controversy when he revealed the Scottish Spending Review 2011 would see large retailers charged a business rates supplement from April next year.
Although the exact level of the supplement has still to be confirmed, a spokesman told SLTN the government expects to raise around £110 million over the three years covered by the Spending Review; £30m in 2012-13 and £40m in each of the two years after.
Shops group the Scottish Retail Consortium slammed the move as an “illogical and unjustified tax on the supermarkets”, and claimed it would force major food retailers to pay half a billion pounds more in tax over the next four years.
But it’s been welcomed by the SLTA, which argued it will address the inequality in the rates system that sees pubs pay as much as 8.5% of their turnover in rates, compared to the 2% paid by supermarkets.
Repeating its call for the rates system to be reviewed, and for all businesses to be rated on the same basis, it also said it hoped the public health levy would persuade the government to think twice about empowering local councils to levy a social responsibility fee on the on-trade.
“The Scottish Government has identified a fair and reasonable way to raise money in this very difficult climate,” said SLTA chief executive Paul Waterson. “Our members support this initiative which will go some way to addressing a major imbalance in the way supermarket rates are calculated.”
The public health levy has been dubbed the ‘son of Tesco tax’, as it’s effectively a diluted version of the larger retailers’ levy the SNP tried to pass in the last parliamentary term. While that levy would have covered general department stores, as well as supermarkets, its new incarnation has been refined to apply to alcohol and tobacco retailers whose rateable value is £300,000 or more; no on-trade premises will be affected.
SRC director Ian Shearer said the levy would “make it harder for food retailers to keep prices down for customers, and make Scotland a less attractive place to do business”.