COLIN MARR: ‘Businesses hit by larger-than-expected tax burdens are finding it tough’
It’s been a tough year for business.
Growth across the UK remains low, and many businesses in the Highlands are still facing challenges in attracting staff; the housing shortage; and our inadequate transport infrastructure, which hampers the movement of goods and people across the region and to further afield.
Business success is crucial. Growing businesses generate more tax revenue and create more jobs, which in turn contribute further to tax receipts. This funds essential public services like the NHS. A portion of this revenue is also reinvested to help businesses grow further, creating a cycle of continued economic growth.
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For the past 20 years, productivity across Europe has fallen behind that of the United States, with one of the main reasons being lack of investment in technology, both at the government and business levels.
When businesses fail to grow, fewer people are employed, tax revenue fails to keep pace with the increasing costs of public services, and the economy stagnates - a situation the UK has found itself in for several years.
The new UK government appeared to recognise the need for business growth - they certainly talked about it often. So, it was disappointing when their first Budget resulted in larger-than-expected increases in business taxes.
It’s a similar story with the Scottish Government. Despite claiming to be a business-friendly administration, they have failed for the third consecutive year to fully pass on the rates relief for hospitality and retail that is available in England. They have also resisted long-standing calls for reform of business rates.
Locally, the hospitality industry is deeply concerned about the proposed “tourist tax”, which would be levied on top of VAT and business rates that are already among the highest in Europe.
At Inverness Chamber of Commerce, we continue to campaign on these issues. Over the past year, we have expanded the services we offer to our members, with more improvements planned. For the year ahead, we’ve made the decision to freeze our membership fees. In light of the many challenges businesses are facing, we hope this gesture helps.
Colin Marr is Inverness Chamber of Commerce’s chief executive.
