THERE is a strong and growing consensus across business and industry in Scotland that the business rates system is out of date, no longer fit for purpose and in need of fundamental reform. The system is a tax on jobs and growth, undermining investment in property and acts as a drag on the Scottish economy.

We want Scotland to be – and to be perceived to be – the best place within the UK in which to do business. However, an unreformed system of business rates is entirely at odds with this aspiration.

A modern, sustainable and transparent system would unleash investment that could bring skilled and entry-level jobs through new and expanded businesses. Those who seek a competitive tax regime as a draw for investment and jobs should apply that logic to business rates.

It is no longer an option to say that reform is too difficult or complicated and we call on all political parties to commit to review options for the fundamental reform of business rates in their manifestos for the 2016 Scottish Parliament elections.

David Lonsdale, Director of the Scottish Retail Consortium,

Box 112, 12 South Bridge, Edinburgh, and Arran Aromatics, Association of Chartered Certified Accountants, Association of Convenience Stores,

Association of Town & City Management Scotland, Booksellers Association, British Aggregates Association, British Hospitality Association, British Independent Retailers Association, Business Centre Association, Boots, CCW Clothing & Footwear, CJ Lang & Son Ltd, Colliers, Dow Investments, Graphic Enterprise Scotland, Greggs , Guitar Guitar, Hamilton & Inches, Harvey Nichols Edinburgh, Horticultural Trades Association, House of Bruar, Intu Properties Plc, Institute of Directors, J H Donald Ltd, John Lewis Partnership, Lloyds Pharmacy, M&S, National Federation of Retail Newsagents, Paper Tiger, Publishing Scotland, Retra, Run4It, Schuh, Scottish Engineering, Scottish Grocers’ Federation, Scottish Property Federation, Scottish Tourism Alliance, Sterling Furniture, Watt Brothers, Wine & Spirits Trade Association.

I HAVE just paid my quarterly VAT bill and it makes my blood boil.

VAT is a tax on turnover, not profit, so even if a business is making a loss the Government takes a substantial chunk of its income.

Economists say that businesses can pass on the cost of VAT to their customers. Whilst that is true of large companies competing with each other, it is not true of a small VAT-registered business like mine whose competitors are under the VAT threshold. In such a case, the tax incidence is on the business and its owner, not the customers.

Small businesses often go to great lengths, not always legally, to avoid hitting the VAT threshold.

The desire to avoid having to register for VAT is perfectly understandable. As soon as a business registers it becomes many thousands of pounds poorer. It is not like income tax, where only the income above the threshold is taxed. The VAT threshold thus becomes a very substantial disincentive to the growth of small businesses with all the benefits for the economy and society that flow from that.

To best way to rectify the VAT trap is for the threshold to become a VAT allowance so that small businesses are only paying VAT on the part of their turnover above the threshold. Such a reform will require the UK to leave the EU.

Otto Inglis,

6 Inveralmond Grove, Edinburgh.