Business leader urges SNP to provide the same tax relief given to English firms

Andrew McRae, chair of the Scotland Policy Unit at the Federation of Small Businesses, has written to Shona Robison, Scottish finance secretary, outlining aggravating factors including the energy crisis and severe cost increases as he updated on the New Deal for Business promised by the SNP.

“There are some tangible outcomes from this work that we can point to as having the potential to make a real difference for small businesses, such as the revision of the Business and Regulatory Impact Assessment to include an extended assessment of the impact new policies will have on small businesses,” he wrote.

Mr McRae, founder of Elephant House International and Harry Potter collectibles retailer, said that FSB members said they “need to see a clear, more immediate, demonstration that there really is a New Deal for Business – and this December, that means a passing on of the non-domestic rates reliefs which have been extended yet again for retail, hospitality and leisure (RHL) businesses in England”.

Andrew McRae (Image: Newsquest) He continued: “As you’ll be aware, Scottish businesses in these sectors have seen no additional relief since July 2022, despite facing exactly the same challenges as their English counterparts.

“When the relief for English RHL businesses was set at 75 per cent, we deliberately did not ask for the Scottish Government to pass on relief at the same rate, recognising that the Small Business Bonus Scheme (SBBS) offers greater relief to Scottish small businesses. However, given that the relief has been reduced to 40 per cent in England, and that changes to the SBBS two years ago have meant that some businesses have lost at least some of that relief, we believe that now is the time for the Scottish Government to pass on, in full, what is being extended to English RHL businesses.”

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I asked Ms Robson about this, and she said: “The 2024-25 Scottish Budget delivers a competitive non-domestic rates regime including the lowest poundage in the UK for the sixth year in a row, and a package of reliefs worth £727 million as at June 1, 2024. Our Small Business Bonus Scheme remains the most generous of its kind in the UK.

“Decisions on non-domestic rates for next year will be considered in the context of the Scottish Budget 2025-26.”

The Scottish Government also said: “The SBBS is available to businesses where the combined rateable value of their premises is £35,000 or less and the values of individual premises are £20,000 or less.

“We estimate around half of the properties in the retail, hospitality and leisure sectors in Scotland will be eligible for 100 per cent relief in 2024-25.”

The Fraser of Allander Institute said it estimates the cost of the 40 per cent discount would be £220m to the Scottish Government.

Rachel Reeves, Chancellor, said last month that the Scottish Government will get a £47.7 billion settlement next year, “the largest in real terms in the history of devolution”.

It includes a £3.4bn top-up through the Barnett formula, with £2.8bn for day-to-day spending and £610m for capital investment.