Rethinking Scotland's Burden: Calls Grow for Business Rates Reform Amid Cost of Living Crisis

The Scottish business community is urging the government to reform its outdated business rates system, which many are struggling to cope with as the cost of living crisis deepens. A new report from the Federation of Small Businesses (FSB) reveals that 75% of small businesses in Scotland believe the current system is unfair and unsustainable. The FSB argues that the complex and often opaque nature of business rates – which can include land, property, and other charges – has led to a lack of transparency and consistency. The impact on businesses is stark. A Glasgow-based live music bar reported a near six-fold increase in its business rates bill, citing a significant rise in council taxes as a major contributor to the increase. This has left the business worried about its future viability and may force it to lay off staff. “This is a wake-up call for the Scottish government,” said the FSB’s Scotland policy director, Kate Murray. “We need urgent reform of our business rates system, which is stifling growth and threatening the livelihoods of countless small businesses.” The FSB is calling on the Scottish government to introduce more transparency and consistency in how business rates are calculated and enforced. This could include capping the rate increase, providing clearer guidance for businesses, and introducing a more equitable payment structure. Meanwhile, some entrepreneurs are taking matters into their own hands. A group of local businesses has come together to push for reform, with many joining forces to lobby for change. The cost of living crisis is exacerbating an already challenging business environment in Scotland. The FSB report highlights that 70% of small businesses are now operating at a loss or breaking even, and many are struggling to stay afloat due to rising costs and reduced profits. As the debate over business rates reform gains momentum, one thing is clear: Scotland’s small businesses need urgent support. The government must act quickly to address these concerns and ensure that its business rates system is fairer, more sustainable, and more supportive of growth. The FSB has called on the Scottish government to introduce a comprehensive review of the business rates system, which should include proposals for reform, including:

• Introducing a cap on rate increases
• Providing clearer guidance for businesses on how to navigate the system
• Introducing a more equitable payment structure
• Enhancing transparency and consistency in how rates are calculated and enforced By taking bold action to address these concerns, Scotland’s government can help create a fairer business environment that supports growth and prosperity.