Wilkies, a clothing retailer that has served Scottish towns since 1898, was this week on the brink of collapse as its owner cited business rates that are 75% higher in Scotland than south of the Border.

The tax is under review and the first report from the New Deal for Business Group, tasked by First Minister Humza Yousaf to reset the relationship between Holyrood and commerce, has just recommended further investigation. It is coming too late for some.

Business rates, alongside the cost of living crisis and Brexit, have been repeatedly flagged this year as potentially fatal factors for struggling businesses.

Comparable companies in England and Wales have benefited from 75% business rates relief, described as crucial during the post-Covid recovery period.

The Herald: The Falkirk branch was one of five to be closedThe Falkirk branch was one of five to be closed (Image: Google)

While the Scottish Government insists it has made up for this elsewhere, the value of its reckoning is disputed by some business owners.

The saga of the historic chain seems to highlight this. The family-owned ladies and menswear business is losing five of its 11 stores after a pre-pack administration with what could be salvaged remaining.

Karen Forret, managing director of Wilkies Limited, said: “Business rates in Scotland are nearly 75% higher than everywhere else in the UK, but we believe our high streets still have so much to offer, and are vital to our communities and economy.”

She also said: “We are proud to keep the Wilkies brand alive and to have saved as many jobs as possible."

In May, The Herald revealed Wilkies’ annual business rates bill of £10,000 for its outlet in North Berwick compared to the tax for a store of the same rateable value across the Border in Berwick-upon-Tweed of £2,620 with the discount. Still no action. The North Berwick store has now closed.

The Herald: Above, the structure of New Deal for Business GroupAbove, the structure of New Deal for Business Group (Image: Scottish Government)

Prior to the review, the Scottish Government said it provided "the number one ask of the business community by freezing the [business rate] poundage".

The New Deal for Business Group this week recommended that the Scottish Government feature non-domestic rates among the wider considerations of its new Tax Advisory Group.

The message from the Scottish Retail Consortium in response was clear. David Lonsdale, SRC director, said: “Whilst the New Deal’s focus on business rates was limited to operational and administrative matters, hopefully the new Tax Advisory Group will get to grips with the onerous burden of business rates and deliver on the government’s ambition to ‘use business rates to boost business’.

“The headline business rate is at a 24-year high and the government’s own fiscal forecasters have pencilled in a chunky uplift for next spring, which if implemented would pose a challenge for sectors with a significant property footprint and add £34 million to Scottish retailers’ rates bills.

“A shift in mindset is needed on business rates with a switch from trying to squeeze tax revenues from commercial premises to one which encourages investment into retail destinations.”

Separately, a Scottish shopping centre was also this week rescued out of administration as a going concern, business editor Ian McConnell revealed. The Antonine Shopping Centre in Cumbernauld was sold to Beltrace (Antonine), a new joint venture company between Belgate Estates and Tracey Investments formed for the purposes of the acquisition.

Elsewhere, there was a toast as The Glenmorangie Company president and chief executive Thomas Moradpour handed over the reins to Caspar MacRae, currently global marketing and business development director, before moving on to take the lead at champagne brand Dom Pérignon.