The Scottish Government’s budget has outlined a 6.7% increase for firms occupying medium-sized and larger commercial premises from 2024 to 2025.
This is the steepest annual rise since 1999 and is close to double the current inflation rate, the Scottish Retail Consortium has said in a statement.
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The decision will see a substantial increase in business rates, with a £31m ($39m) hike set to take effect from the end of March 2024.
It will impact 22,120 commercial properties, with 4,550 shops subject to the intermediate and higher property rates facing a collective annual rise of £31.2m in their rates bills.
The increase will elevate the business rate for these premises to the highest it has been since 1999.
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The 2,410 stores paying the higher property rate will be subject to a higher business rate than their counterparts in other parts of the UK.
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By GlobalDataThe rate hike is not limited to retail, and pubs and restaurants will also see their rates bills increase by £2 million from 1 April 2024.
Hotels, offices and industrial properties will experience rises of £7.8m, £23.5m, and £32.4m respectively.
The Scottish government also disclosed that a public health surtax on larger grocery stores is under consideration, which could further compound the financial burden if it comes into effect alongside the business rate increase.
Scottish Retail Consortium director David Lonsdale said: “Scottish retail sales are flatlining, shopper footfall remains below pre-pandemic levels, and the economic outlook is uncertain.
“Yet despite this, shops in Scotland occupying medium-sized and larger premises are set to fork out a whopping £31m extra annually in taxation starting from next week as the business rate spirals to a twenty-five-year high.
“Public policy is loading new statutory costs onto stores, many of whom underpin the health and viability of Scotland’s high streets and retail destinations.
“This increases the cost of maintaining stores and serves to make things even trickier for retailers striving to trade profitably and become more productive.”
