SRC: Scots firms to pay £55m more in rates than English counterparts this year
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Firms occupying larger premises in Scotland are set to pay £54.7 million more than their equivalent-sized counterparts down south in the coming year, from 1 April.
The figures have prompted the Scottish Retail Consortium (SRC) to reiterate its call for rates parity with England and for the introduction of a new ‘Poundage Rate Lock’, so that Scots retailers are never again charged more in rates than counterparts down south.
In response to a written parliamentary question from North East Scotland MSP Michael Marra, Scottish Ministers have confirmed that the Higher Property Rate differential between Scotland and England will be 1.3p in the pound, costing Scots ratepayers an extra £54.7m in 2025-26.
Shops will account for £9.1m of this surcharge, with hotels £2.5m, offices £6.4m, and factories £9.3m. Pubs, cinemas and caravan parks are also affected.
| Table 1: Estimated cost of setting the higher property rate to 55.5p | |
| Property class | Estimated cost |
| Shops | 9,100,000 |
| Public houses and restaurants | 400,000 |
| Offices | 6,400,000 |
| Hotels | 2,500,000 |
| Industrial subjects | 9,300,000 |
| Leisure, entertainment, caravans, etc. | 1,100,000 |
| Garages and petrol stations | 400,000 |
| Cultural | 100,000 |
| Sporting subjects | 200,000 |
| Education and training | 5,000,000 |
| Public service subjects | 2,600,000 |
| Communications | 300,000 |
| Quarries, mines, etc. | 100,000 |
| Petrochemical | 1,500,000 |
| Religious | <50,000 |
| Health and medical | 1,900,000 |
| Other | 1,400,000 |
| Care facilities | 100,000 |
| Advertising | 100,000 |
| Statutory undertaking | 12,400,000 |
| All | 54,700,000 |
The Higher Property Rate is liable on commercial properties with a rateable value of £100,000. There are 11,360 such premises. It is a slab tax and so the higher tax rate applies to each pound of a property’s rateable value.
This surcharge was described as “damaging perceptions” of Scotland’s competitiveness by the Barclay Rates Review, which called for parity with England to be restored by Spring 2020, some five years ago.
Despite some welcome decisions in the Scottish Budget including a freeze in the Basic Property Rate, the rates burden remains onerous and at a 26-year high. Meanwhile smaller stores in Scotland are missing out on the temporary rates relief being made available to counterparts in Wales and England.
David Lonsdale, SRC director, said: “There is a pressing need to lift private sector investment here in Scotland yet firms liable for the Higher Property Rate continue to pay more than their counterparts in England, to the tune of £54.7m annually.
“Shops account for £9.1m of this, making it even more expensive to operate a store on our high streets and retail destinations at a time when retail sales and footfall are at best flatlining.
“We’re baffled as to why thousands of stores and other businesses operating here in Scotland are thought to be better placed to fork out more in rates than similar sized premises down south. This Scotland-only surcharge increasingly sticks out like a sore thumb. Ministers must stand by their pledge to restore parity with England and commit to a new ambition, a Poundage Rate Lock, so that Scots retailers are never again charged more than their counterparts down south.”
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