What businesses really want is to be able to plan ahead, says JLL
Edinburgh-based JLL, a commercial property specialist, is warning that although the Scottish Government’s business rates revisions revealed in last week’s Scottish Budget appear to be good news, the devil will be in the detail as businesses continue to avoid key budget and investment decisions as they pre-empt a tax hike.
David Burke, director of rating at JLL, said: “The decision to match the ‘small’ multiplier in England at 46.6 in the pound ensures parity with ‘small’ ratepayers south of the border and puts Scotland on a level playing field.
“The Scottish Government should also be applauded for enhancing the Small Business Bonus Scheme which means that nearly 100,000 firms across Scotland will benefit from either reduced or zero business rates.
“At present all properties with a Rateable Value (RV) of more than £35,000 pay the ‘Large’ multiplier which subsidises those businesses with a combined RV up to and including £18,000, and where below RV £10,000 no rates are paid tapering to 25% relief at RV £18,000.
“From 1 April 2017 this lower threshold will be increased to RV £15,000 and all RVs below £51,000 will benefit from the reduced rate poundage. Again, this is essentially the same as England. So far, so good.
“However, as we so often say, the devil is in the detail. The downside to achieving parity is that the cost is borne by ‘large’ businesses.
“By proposing to increase the ‘large’ business supplement, currently 2.6 in the £, and make other changes to other reliefs to raise £130 million, the Scottish Government is in danger of further eroding Scotland’s competitiveness.
“While the Minister talked very candidly about minimise barriers to investment through the rating systems, business in Scotland will still have to wait until next year to discover their fate.
“What businesses really want is to be able plan ahead and the early release of the draft 2017 Valuation Roll would have been extremely helpful, if England & Wales can do this three months ago then why can’t Scotland?”
JLL has previously warned that Scottish businesses are avoiding key decisions on budgets and investments as they prepare for possible tax hikes in 2017, following the surprising reformulation of business rates in England & Wales in this year’s Autumn Statement.