Reduction and revamp of business rates among chamber budget requests

The reduction and review of business rates is among the requests of the Aberdeen and Grampian Chamber of Commerce (AGCC) ahead of the Scottish Government’s budget.

The call comes ahead of finance secretary Shona Robison laying out her tax and spending plans next week.

Ahead of its publication, the chamber has written to the finance secretary with a series of requests, chief among them relating to the non-domestic rates paid by businesses.

“Up-front, local business property taxes, calculated on the basis of location and square footage as opposed to business performance and profitability, put many companies with the requirement for premises at a huge competitive disadvantage,” said chief executive Russell Borthwick in the letter.

Mr Borthwick – who said brick-and-mortar businesses are left at a “competitive disadvantage” compared to online firms – pushed for relief for hospitality businesses to “ease immediate pressures” along with a reduction in the rates paid by those in the “most adversely affected sectors”.

But he also pushed for a longer-term reform, saying: “We would like to see the UK and Scottish Governments taking a holistic review of business taxation to determine whether local business rates are stimulating or hindering productivity.

“The scope of this review could include consideration of whether a balanced system of local and online sales taxes would provide a fairer alternative to the out-of-date nondomestic rates regime.”

Elsewhere, the Chamber called for a “simplified” income tax system, adding that higher rates in Scotland compared to other parts of the UK was “making it harder to attract and retain senior talent”.

“We would urge you to take a pragmatic approach that prioritises boosting economic growth and productivity as a more effective way to increase revenues and living standards,” the letter said.

The chief executive also pushed for reform to the planning process for energy developments, the ramping up of the £500 million Just Transition Fund, investment in infrastructure, housing arts and culture and higher education.

The recent decision to increase the employer contributions to National Insurance, Mr Borthwick said, could have a “chilling effect” on charities offering services to the public sector.

He urged the Scottish Government to lobby Westminster “for an exemption from the NI increases for third sector organisations delivering essential public services and explore other ways to mitigate the impact on frontline services”.

The Scottish Government has been contacted for comment.