HARD-PRESSED retailers will see £5 million shaved off their rates bills next year as a result of changes announced by Derek Mackay, industry figures have said.

Scottish firms previously called on the finance secretary to revamp business rates following tax breaks ushered in by Chancellor Philip Hammond in last month’s UK Budget.

Announcing the Scottish Government’s spending plans, Mr Mackay said he would follow suit and mitigate rising bills.

He said future increases would now be based on the Consumer Price Index (CPI), as opposed to the higher Retail Price Index (RPI), meaning the levy will rise by three per cent in April rather than four per cent.

David Lonsdale, director of the Scottish Retail Consortium, said the move showed Mr Mackay was “listening to the retail industry and the growing chorus from across business and commercial life in Scotland who have spoken up in favour of action to mitigate rising rates bills”.

He said: “This is positive news that will shave £5 million off the rates bills of hard-pressed retailers next year, and more than that in future years.”

Mr Mackay also announced a range of measures to “incentivise investment”, including a “growth accelerator” that will mean no business rate hikes will be payable for new or improved properties for a period of one year.

An additional move will “ensure that no new build property will enter the valuation roll until it is first occupied”.

Meanwhile, Mr Mackay said the small business bonus scheme – which lifts 100,000 properties out of business rates altogether – will be protected.

“This scheme is part of the most competitive package of rates relief anywhere in the UK,” he said. “And in the coming year this package will be worth around £720 million - a record high.”

He added: “Our package of business rates measures provides a boost of almost £100m and helps keep Scotland the most attractive place in the UK to do business.”

Andy Willox, Scottish policy convenor for the Federation of Small Businesses, said moving to a different inflation measure would mean a smaller increase to many firms’ bills.

He added: “Further, the introduction of a new business accelerator relief is a clever move that deserves plaudits. By far the most valuable commitment in the budget for Scottish smaller firms is the retention of the small business bonus rate relief.”