Business Rates Cut Will Aid Economic Growth

3rd April 2008

The Small Business Bonus Scheme will save Scottish businesses up to £165 million a year, John Swinney said today.

The reduction and removal of business rates for 150,000 small businesses in Scotland came into force on April 1st. In the first year it is expected to result in savings of up to £75 million - rising to the £165 million when the full discounts come into force in future years.

The Cabinet Secretary today visited M&R Dog Fish - an aquarium and aquarium supplies business in Glasgow that is set to reinvest the money it saves from the scheme back into developing the business.

Owner Jim Wilson said he is considering using the extra money to refurbish the shop, employ an additional member of staff and invest in new product ranges.

A business such as M & R Dog Fish, with a rateable value of some £5,150, stands to save around £1,200 in 2008-09 and £1,650 in 2009-10 compared with the former Small Business Rate Relief Scheme.

The Cabinet Secretary said: "This government is delivering a lower taxed, more competitive business environment for small businesses the length and breadth of Scotland.

"April 1st was a significant date for anyone who runs a small business like M & R Dog Fish in Scotland. And it was a significant milestone for the Scottish economy as a whole.

"At a time when businesses face the challenge of rising costs in areas like fuel, this government is acting to reduce the burden of taxation they face.

"The scheme will save millions for our small businesses. Money that they will be able to use to grow their business to their full potential - just like Jim Wilson at the business I visited today intends to do.

"By doing so we will breathe new life into Scotland's town and city centres, freeing entrepreneurs to invest in the success of their businesses and their communities. And we will take a significant step towards achieving our goal of sustainable economic growth."

Andy Willox, OBE, FSB Scotland Policy Convener said: "FSB Scotland has campaigned for a long time for an extension to Small Business Rates Relief and we are delighted that the Scottish Government has responded to us and moved quickly to implement a key manifesto commitment that will have a significant impact on the cashflow of tens of thousands of small businesses.

"The Small Business Bonus is five times more generous than the rates relief available to small businesses south of the border, and this competitive advantage has made Scotland one of the most attractive places to start up or grow a business in the UK. Small firms in Scotland account for 53 per cent of all private sector employment so this groundbreaking initiative will have a positive effect upon huge swathes of the population.

"Over half of Scotland's business community will be eligible to benefit from the Small Business Bonus and we are urging all of our members to make sure they apply for the rates relief they deserve.

"In addition, we're asking all small businesses in receipt of this bonus to consider how they use these savings to boost their business and grow the Scottish economy. The Scottish Government has given the business community a welcome boost, and it's now up to us to help deliver stronger economic growth."

M&R Dog Fish owner Jim Wilson said: "The reduction in business rates will be extremely beneficial to the business. "I will be looking at taking on an extra part time member of staff, refurbishing the shop and investing in new product ranges.

"The extra help will allow me a bit more breathing space to think about how I can take the business forward in the future. More than that, it just helps me feel more positive about the business and its prospects."