By Ian McConnell
Business leaders have welcomed a ‘lifeline’ from the Scottish Government in the form of extension of rates relief, highlighting the importance of the move to firms’ survival.
Finance Secretary Kate Forbes today unveiled proposals for retail, tourism, hospitality and aviation businesses to pay no rates during 2021/22, following confirmation of a further £1.1 billion of consequential funding arising from UK Government coronavirus spending.
Unveiling the extension of non-domestic rates relief, the Scottish Government said: “The move builds on the three-month rates relief extension announced in the Scottish Budget and will be taken forward provided the Scottish Government receives the funding already assumed from the UK Budget on 3 March, and that requisite funds are available to maintain existing support into 2021/22.”
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SRC director David Lonsdale said: “The Finance Secretary has once again moved with commendable speed to back businesses which have been left reeling by the impact of coronavirus. She has clearly listened to our representations and has responded positively to remove the burden of business rates from retailers for the next twelve months. This is a bold and significant move and a vital shot in the arm for the sector, much of which remains closed and faces an uncertain future.”
Noting the SRC had been “in the vanguard” of the campaign to extend relief, Mr Lonsdale added: “The business rates waiver has been a lifeline for the retail industry, much of which has had to cease trading three times so far during the pandemic whilst at the same time investing significantly in Covid safety measures. Scrapping business rates for the coming year provides a much-needed cashflow and confidence boost for the industry – Scotland’s largest private sector employer – as it hopefully emerges from lockdown and seeks to recover.”
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Andrew McRae, the Federation of Small Businesses’ Scotland policy chairman, said: “Extending rate relief for the next financial year will allow many more smaller firms to make it through to the end of this crisis and help them get back on their feet when the economy reopens.”
The Scottish Licensed Trade Association, which has been calling for an extension to the existing rates holiday, welcomed the decision.
It declared the announcement by Ms Forbes was a “weight off our collective shoulders”.
SLTA spokesman Paul Waterson said: “Extending 100% rates relief for the next financial year gives pubs, hospitality and tourism a fighting chance when we do re-emerge from lockdown.”
He added: “However, what we need now is for UK Chancellor Rishi Sunak, in his Budget on March 3, to keep VAT at 5% and also extend current furlough arrangements. While rates are generally the biggest fixed rate costs for the hospitality industry, we look forward to further concessions that will help businesses.”