Comment by Gillian McKenzie
BUSINESS rates have been suffocating the Scottish on-trade for far too long.
The way in which they are calculated – with pubs’ rateable values based on turnover while businesses in other sectors are worked out on square footage, meaning on-trade operators can see around 8% or 9% of their turnover going on rates compared to 1% or 2% for other businesses – is unfair.
The fact current rateable values are based on figures from 2008 – a very different trading landscape for many operators before the recession took hold, the lower drink drive limit was implemented and auto-enrolment pensions and the National Living Wage took effect – and that the rates revaluation will not take place until 2017 underlines the need for a complete overhaul.
That’s why the launch of the Scottish Government’s review of business rates is welcome.
Former RBS Scotland chair Ken Barclay, who is leading the review group, said the aim is to take forward recommendations which “seek to enhance and reform the system to better support business growth and reflect changing marketplaces whilst still maintaining the level of income necessary to provide funding for services upon which businesses rely”.
It remains to be seen the recommendations that emerge when the group reports to ministers in July 2017. Before that, it wants business owners in all sectors to submit their views on how the non-domestic rates system should be overhauled; the consultation runs until October 7.
Given that the trade has been hammered by rates for so long, it’s vital operators seize the opportunity to have their say.