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FSB: Rates reforms will fail without modernisation drive

Scottish Government plans to introduce more frequent business rate revaluations will fail without a modernisation drive, according to the Federation of Small Businesses (FSB). The small business campaign group has urged Ministers to deliver a reformed system ahead of the next Scottish Parliament elections.  

In an official response to a consultation on proposed business rates legislation, the FSB warns the Scottish Government that the delivery of a more modern and user-friendly tax system looks unlikely without Ministers providing leadership and resources. 

Andrew McRae, the FSB’s Scotland policy chair, said: “Tens of thousands of Scottish smaller firms get a leg up thanks to the Scottish Government’s Small Business Bonus scheme. But even those in receipt of this help can find the rates system bureaucratic and old-fashioned.

“We urged Ministers to introduce more frequent revaluations, so that firms’ bills better reflect market conditions. But for that to work, we need the system to purr, rather than creak. In our view, a more modern system would pay dividends for both the taxpayer and the state.”

The next business rates revaluation in Scotland will take place in 2022. FSB has urged Ministers to deliver a modern rates system a year ahead of the next Scottish Parliament elections in 2021. 

Andrew McRae said: “What we’ll need to see alongside these new laws are Ministers dragging the system into the 21st century. That means a new national digital interface to pay your bill and apply for help. That means bodies involved in the system working in harmony. That means the provision of intelligible information about how your bill is calculated to ratepayers.” 

In its submission, FSB argues that a new digital rates interface could integrate with the Scottish planning and licensing systems. Further, the small business body strongly supports Scottish Government moves to introduce new rates help for firms renovating or improving property. 

Andrew McRae said: “Scottish Ministers have shown an appetite for reform with the introduction of their new Business Growth Accelerator. But they can’t stop there. While FSB supports many of these legislative changes, they must be matched with the grit to succeed.”