CBI: Use business rates to promote investment in Scotland
14th October 2016 | News
Following recent weaker growth throughout Scotland, the Confederation of British Industry (CBI) has responded to the Independent Review of Scottish Business Rates by calling on the Scottish Government to use business rates reform as a mechanism to promote investment and employment; helping firms remain competitive.
CBI Scotland has warned that failure for the Government to take action now would risk diminishing tax revenues, with businesses forced to amend their working models to minimise their commercial property overheads i.e. moving elsewhere in the UK or Europe where lower tax rates exist.
Hugh Aitken, director, CBI Scotland, said: “Businesses are vital to driving economic growth and raising living standards in Scotland through investment and job creation.
“Ensuring a competitive tax environment will encourage companies of all sizes to grow and prosper.
“Non-domestic rates on commercial property are one of many ways companies rightly contribute to the public purse and to local services, but the system must reflect current economic realities facing the country and businesses.
“Scotland has been going through a period of slower growth and is facing an economic adjustment, following the vote to leave the EU, so more than ever business rates must promote and safeguard investment in the country.
“Scotland is competing on the global stage and if the Scottish Government fails to act now it risks losing tax revenue in the long-term.
“Companies may choose to adapt their business models to reduce their commercial property footprint here, or simply move their operations to more competitive locations elsewhere.”
Subsequently, the CBI’s submission recommends the following for the Scottish Government’s consideration:
- Continuing to align the Scottish business rates multiplier with other parts of the UK to avoid a deterioration in Scottish business competitiveness.
- Indexing business rates by CPI from 2017/18 in order to avoid unsustainable increases in the business rates multiplier for property based businesses.
- Exempting new investments in plant and machinery and environmental efficiency from business rates to encourage productive investment.
- Valuing Scottish business properties every three years in order to make business rates more relevant to current economic conditions and minimise tax barriers to redevelopment.
- Modernising billing and collection of business rates to minimise administrative and compliance charges.