(Image: Newsquest)
The boss of a leading Scottish jeweller has criticised the "unfair" business rates burden faced by retailers north of the Border, warning that investment is increasingly being directed to England, where he argues the system is more competitive.
Kyron Keogh, managing director of Glasgow-based ROX, said retailers contribute a disproportionate share of business rates relative to their economic output and employment footprint in Scotland.
He also claimed Scottish retailers are at a disadvantage compared with their counterparts in England, where business rates relief is more generous and the multipliers used to calculate bills are lower.
Mr Keogh's comments come as The Herald's Reset The Rates campaign calls on the Scottish and UK Governments to implement six reforms aimed at improving Scotland's business rates system and encouraging investment in town and city centres.
ROX has eight stores around the UK, including Glasgow and Edinburgh.
Mr Keogh told The Herald: “Retail is Scotland's largest private-sector employer. It represents around 15% of private-sector employment and makes a significant contribution to Scotland's economic output. Yet retail accounts for around one-fifth of all business rates collected in Scotland.
“Historically, that figure was even higher. Almost five years ago, around one quarter of all business rates came from retail. So, there's always been an imbalance there, and retailers have long felt that it was unfair and needed to be addressed.
“We're a retailer with shops in both Scotland and England, and the first point that needs to be made is that we're simply asking for a level playing field. Scotland's retailers already make a substantial contribution to the economy, but Scotland is becoming a less competitive place to invest than other parts of the UK, particularly England.”
Kyron Keogh is asking for a 'level playing field' with England on rates (Image: Newsquest)
“I have a shop in Liverpool. For a similarly sized unit, the rates bill is almost half of what I have to pay in Glasgow. That gap is widening for many retailers.
“The debate isn't just about helping retailers. It's about protecting jobs, attracting investment and supporting our town and city centres.”
The Scottish Retail Consortium has highlighted the differing approaches that have been taken to rates relief for the retail sectors in Scotland and England by the Scottish and UK Governments, and argues that the relief provided in England is “way more generous” than north of the Border.
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In Scotland, business rates relief of 15% is currently provided to eligible retail, hospitality and leisure properties with a rateable value of up to £100,000, capped at £110,000 per business per year.
Until March of this year, the UK Government had provided relief of 40% to properties in those sectors in England, capped at £110,000 per business, with no upper limit on rateable value in terms of eligibility. That arrangement has been replaced by permanent retail, hospitality, and leisure multipliers which are 5p in the pound below the headline rate, with no cash cap. For 2026-27, those multipliers are 38.2p in the pound for properties with rateable values below £51,000, and 43p in the pound for rateable values above £51,000.
According to the Scottish Retail Consortium, there are around 2,300 shops in Scotland with a rateable value of £100,000 or higher which are ineligible for relief in Scotland. Moreover, the organisation argues that the industry in Scotland is further disadvantaged because these shops are liable for the higher property rate of 54.8p in the pound, compared with the rate of 43p in the pound paid by stores of a similar size in England.
The SRC also notes that the poundage rates faced by retailers in Scotland are higher than the equivalent multipliers set by the UK Government in England.
Mr Keogh, who chairs the Glasgow Business Improvement District, said: “For our city centres and high streets to be vibrant, safer and cleaner, we need investment in these locations. We need economic growth and we need our shops to thrive.
“Scotland has to compete for retail investment. Business rates are one of the largest costs associated with operating physical stores, yet many medium-sized and large stores pay substantially more in business rates than comparable stores in England. I see that in my own business.
“When retailers decide where to invest, they compare costs across the UK. Scotland needs to compete for that investment, not make it easier for it to go elsewhere.
“From my perspective with the Business Improvement District, if we want vibrant city centres, we need investment and job creation. The Government needs to look at that.
“More broadly, we need to examine the rates system itself. Every government has kicked this can down the road for the past 15 years. Nobody has really been willing to grasp the nettle and look properly at business rates reform.
“That's the real issue. Someone needs to sit down and assess whether the entire system is still fit for purpose. I appreciate the Government needs to raise revenue and that there is only so much money available. It's about how that pie is divided. Right now, retail is paying a disproportionate amount relative to its economic output and the jobs it creates.”
David Lonsdale, director of the SRC, said: “To their credit, the Scottish Government has recognised that retailers pay a disproportionate amount in business rates and the new retail, hospitality and leisure sectors rates relief which came into effect in April is a positive step forward.
“That said, it is less generous at every level compared to the equivalent RHL relief in England and unlike in England it contains a cap on eligibility which means it doesn’t benefit all stores that a retailer may have.
“In addition, medium-sized and larger stores with a rateable value over £100,000 are excluded from RHL relief, again unlike in England. Yet these larger stores underpin the vitality of our town and city centres by driving footfall and expanding the range and diversity on offer. As such these stores pay a business rate which is considerably above – about a quarter higher – that of similarly-sized counterparts down south, to the tune of tens of thousands of pounds a year.
“If this persists and Scotland continues to be a materially more expensive place to operate shops, it could see a shift in retailers’ investment down south. Continued investment in stores is essential to keep them viable and attractive to customers and to minimise the number of shuttered shops on our high streets. It’s not in the interests of Scotland’s economy for shop owners to be incentivised to invest in Berwick-upon-Tweed or Bristol over Balloch, Bathgate, or Brechin.
“We need a more ambitious approach from the Scottish Government which at the very least restores a level playing field with England on the business rate for retailers. In turn this will help to deliver on the First Minister’s recent pledge to make Scotland the best place in the UK to grow a business.”