SCOTTISH retailers ramped up their opposition to proposals for the reintroduction of a surtax on major grocers today, as the reverberations of the Budget for 2024/2025, announced in December, continued to be felt.

The industry was angered when it emerged in Budget documents that Scottish ministers were considering bringing back the surcharge in the interests of “sustaining the public finances”.

It fuelled the disappointment that was already felt in the sector following the announcement of a Budget that will bring inflationary rises in both the intermediate and higher property rates, used to calculate business rates in Scotland for premises valued between £51,001 and £100,000, and for those valued above £100,000, when the new financial year begins in April.

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In a bid to highlight the impact the surtax, or public health supplement, would have, the Scottish Retail Consortium declared today that grocery stores would need to raise around £1 billion of additional sales each year to cover the cost.

The SRC, moreover, noted that the surtax proposal comes at a time of continuing pressure on food retailing margins, declaring that its monthly Scottish Retail Sales Monitor shows that the real terms value of food sales had declined in 2023.

“The consideration being given by Scottish ministers to an arbitrary business rates surtax on grocery stores is alarming,” said SRC director David Lonsdale. “It risks breaching government promises made on business rates and would mark a decisive departure away from the pledge to finally restore rates parity with England.

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“Ministers say they are considering introducing the tax to raise funds for the public sector. However, why retail alone has been singled out – for now at least – as a potential milch cow remains a mystery.

“A surtax would have real world implications and unintended consequences for retailers, store colleagues, customers, and other public policy aims.”

A previous version of the surtax, in place from 2012 to 2015, came at a cost of £96m for the firms affected, the SRC said.