Figures unearthed today highlight the cost of the Scottish Government’s scheme to increase the number of small businesses not paying business rates as £224 million for 2017/18. The government proposals will offset the extra cost to the taxpayer by applying record increases in rates for medium and large businesses.
In response to questions tabled by North East MSP Mike Rumbles MSP, the Minster said that there is no overall increase in revenue from the changes, but many medium and large employers in places like the North East are expecting to see bills rise by hundreds of thousands of pounds.
Mr Rumbles said: “The Scottish Government are giving with one hand and taking with the other. The punitive increases for many businesses will mean that medium size employers like restaurants and hotels will have to look again at the amount of staff they take on, and how much they can afford to pay in wages.
“It is certainly welcome news that many smaller businesses will benefit from being raised out of paying rates altogether, but this is a slight-of-hand and not an overall investment in the Scottish economy.
“In the North East our larger employers have been forced to make extremely damaging cut backs, and these Scottish Government changes will only deepen the wound. Rather than see our larger businesses pay for our smaller ones we need to see the Scottish Government take responsibility for their own decisions and support the Small Business Bonus Scheme out of government coffers.”
Notes for editors:
Questions Mike Rumbles to Finance Minister Derek Mackay:
- Mike Rumbles (North East Scotland) (Scottish Liberal Democrats): To ask the Scottish Government how much the full exemption of business rates for 100,000 small firms will cost.
Answered by Derek Mackay (09/02/2017): The Scottish Government estimates that the cost of the expanded Small Business Bonus Scheme will be around £224 million for 2017-18.
- Mike Rumbles (North East Scotland) (Scottish Liberal Democrats): To ask the Scottish Government how much the proposed increase in business rates will raise (a) nationally and (b) in North East Scotland.
Answered by Derek Mackay (31/01/2017): There is no proposed increase in business rates revenue. We are supporting business by not insisting on a revenue-neutral revaluation which would have meant a higher poundage for Scotland. The poundage will decrease by 3.7% in 2017-18.