BUSINESS leaders have criticised a change to rates relief on empty premises that comes into force today which they warn will have a huge impact on already struggling Scottish firms.
Relief on premises vacant for three months or more has been cut from 50% to 10% in a move it is estimated will cost property owning businesses north of the Border at least £36 million over the next two years.
The Scottish Government is hoping its plan will force owners to breathe new life into "ghost town" high streets hit by the recession by letting empty premises out at reasonable rates.
However, CBI Scotland, which represents business interests, condemned the cut.
Assistant director David Lonsdale said: "The decision to introduce this £18m-a-year tax rise on businesses with empty premises is bewildering and disappointing.
"It is a tax on distress and wholly at odds with Scottish Government promises to promote private sector investment.
"When unveiling this tax rise, the Scottish Government's Finance Secretary said it would incentivise the use of empty commercial premises.
"For our members it feels more like a stick than a carrot. After all, commercial premises are rarely left empty on purpose, particularly where they do not generate an income."
Meanwhile, the Royal Institution of Chartered Surveyors said its members overwhelmingly believe the plan will not rejuvenate high streets.
It found 73% of people it polled believe the new 10% relief would not bring about improvement, with 70% believing it would be detrimental to town centre regeneration plans.
CBI Scotland added that coupled with a supplementary rates levy on larger retailers introduced last year, £131m of new additional business rate taxes are being introduced during the current Government three-year spending review.
Mr Lonsdale added: "Government should be doing what it can to keep down the costs of doing business in Scotland, particularly in the current economic circumstances, not increasing them with additional taxes.
"Our fear is that if ministers fail to achieve their ambitious targets for efficiency savings, they may come back and tap the business community with further rates rises.
"The Scottish Government should move swiftly and give a firm commitment it won't bring in further new or additional rates levies during the remainder of the current Parliament."
The Scottish Conservatives said there had been a lack of consultation and ministers should have ordered a Business and Regulatory Impact Assessment.
The rate-relief cut, included in the Local Government Finance (Unoccupied Properties) (Scotland) Bill passed last year, will also give councils the power to increase council tax by up to 100% on 25,000 homes that have been empty in the long-term.
Conservative local government spokeswoman Margaret Mitchell MSP said the move was fundamentally flawed. "Not a shred of evidence has been presented by the Government to suggest the owners of empty properties are keeping them unoccupied intentionally, nor has the Government provided empirical evidence suggesting the number of properties that will be brought back into use because of the relief cut."
A Scottish Government spokeswoman said empty property relief remained the most generous in the UK, despite the changes.
She added: "We recognise the importance of our business rate reliefs in stimulating economic growth. This Government is working tirelessly to retain Scotland's position as the most supportive business environment and that is why we have the most competitive business rates regime in the UK, worth more than £560m next year."
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