The latest ONS Consumer Price Index reveals that inflation stood at 1.7% last month. September’s inflation rate is what UK Ministers traditionally use to calculate the business rate for the coming financial year. If Scottish Ministers follow suit – as they often do - then retailers in Scotland could potentially face an extra £13m on their annual business rates bills from April 2025. Retail accounts for about a fifth of all rates.

It comes as Scottish retail sales continue to flatline and retailers face greater outlays to run their business including additional statutory obligations on sustainability and recycling, obesity, and the national living wage.

Scotland’s business rate is already at a 25-year high. An inflation-linked uplift could see the tax rate pierce through 50% for the first time since the advent of devolution. Medium-sized and larger stores are liable for the Intermediate and Higher Property Rate which saw a 6.7% increase (£31m extra) in their rates bills this year. Almost 2,500 shops are liable for the Higher Property Rate and stump up a higher business rate than counterparts down south. In addition, the last Scottish Budget mooted the introduction of a business rate surtax on larger grocery stores.

David Lonsdale, director of the Scottish Retail Consortium, said: “Retail sales have flatlined over the past year and trading conditions remain challenging. Despite this, it seems a chunky £13m extra could be added to retailers’ rates bills next Spring.

“With the business rate already at a 25-year high a far more ambitious and coherent approach is urgently required, one which views rates as a means of stimulating commercial investment in retail destinations rather than squeezing yet more tax revenue. Increasing taxes further could exacerbate the problem.

“We hope Scottish Ministers will act in the Budget to focus on economic growth and help make Scotland the best place to grow a retail business in the UK, by ruling out any increase in the business rate and by shelving the mooted surtax on grocery stores.”