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Retailers urge Scottish ministers to keep tax rates competitive

The Scottish Retail Consortium is calling for new landfill tax charges to be 'no higher than in the rest of the UK'.

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© HEMEDIA / SWNS Group

Scottish ministers are being urged to keep rates competitive with the rest of the UK when using newly devolved tax powers.

Retail chiefs have called on the Holyrood administration to keep the new landfill tax charges "no higher than in the rest of the UK" when Scotland becomes responsible for them in 2015.

The Scottish Retail Consortium (SRC) also said ministers should "caution" against any changes which would mean people in Scotland paying more in income tax than those living in the rest of the UK when limited powers over income tax are handed to Edinburgh in 2016.

The SRC issued the plea as it made a number of detailed recommendations to Finance Secretary John Swinney for his budget for 2015/16, which will be published in the autumn.

The retail industry is the largest private sector employer in Scotland, providing 255,000 jobs.

The SRC wants Mr Swinney to ensure rates set under the new Scottish Landfill Tax - one of the powers devolved in the 2012 Scotland Act - are "no higher than in the rest of the UK, with any rises remaining in line with inflation only".

It added: "The 10p Scottish Rate of Income Tax is to be applied in 2016/17, and Scottish ministers will be developing their thinking over the coming months about the rates to be applied.

"We would caution against any move which would mean people in Scotland paying more than elsewhere in the UK."

The SRC called for the council tax freeze to be maintained next year and said if a rise was to be considered for 2015/16, this should be "kept to a minimum, for example in line with inflation".

It urged reform of non-domestic rates, saying the system was "no longer fit for purpose", describing the current system as a "disincentive to invest in commercial premises" and adding that "the tax seems to only ever rise, and retailers pay disproportionally more than other sectors".

Growth

The SRC called on Mr Swinney to ensure the business poundage rate in Scotland rises no faster than elsewhere in the UK.

The industry body said if the Scottish Government was to receive any cash "windfall" as a consequence of Westminster's budget decisions, this money "should be used to invest in infrastructure projects or high streets".

SRC director David Lonsdale said: "We fully support the Scottish Government's objective of increasing sustainable economic growth.

"The retail industry has a great story to tell in terms of creating jobs and investing in our communities, and the Scottish Government's next budget provides a fantastic opportunity to assist the sector to further build on its strong record.

"That is why our members believe that at the heart of the Scottish Government's next tax and spending plans should be measures which help keep down the cost of doing business and cost of living, provide for a smarter regulatory environment, and give retailers the tools to grow."

A Scottish Government spokeswoman said: "We recognise that times remain challenging for retailers, and the Scottish Government is committed to helping the sector.

"More than 92,000 premises benefited from our Small Business Bonus Scheme in the last year - and the scheme is now being expanded to benefit thousands more smaller firms.

"We have made clear our commitment to match the poundage with the UK, to offer the most competitive system of business rates in the UK and to maintain the council tax freeze throughout this parliament.

"In addition while a small number of very large retailers currently pay the public health supplement, we were clear since introduction in 2012 that this temporary measure will end in March 2015.

"And there is more good news for small business, with proposals in the Community Empowerment Bill to allow councils to create their own business rate relief schemes, giving them the flexibility to reduce rates for businesses in response to local circumstances.

"Our town centre action plan includes a range of measures designed to support town centre businesses and recognises the need to ensure town centres diversify their offer and respond to local demand.

"However, it is only with independence that we could create a genuinely appropriate set of complementary policies - in relation to taxation, innovation and labour market regulation - to secure stronger levels of economic growth and job creation from which everyone in Scotland would benefit."

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