McArthur urges ministers to find appropriate way to tax pubs and hotels

Orkney MSP Liam McArthur has urged the Scottish Government, in responding to the Barclay Review on non-domestic rates, to find a more appropriate way of taxing pubs and hotels.

According to Mr McArthur, his calls come after concerns were expressed by many local businesses in Orkney’s hospitality sector facing the prospect of dramatic rises in their rates bills.

Mr McArthur has said the Barclay Report into non-domestic rates, published last month, has offered little encouragement for the hospitality sector.

Speaking during Finance Questions this afternoon, Mr McArthur asked the Cabinet Secretary for Finance, Derek Mackay MSP, if he recognised the current approach of taxing pubs and hotels based on turnover rather than profitability “will do nothing to help generate jobs, wages and tax revenues.”

Responding to Mr McArthur, the Cabinet Secretary for Finance confirmed that he would make a statement to Parliament on the Barclay Review next week.

Following the exchanges, Orkney’s MSP said: “We already know through a freedom of information request that Scottish Government Ministers have conducted no assessment of how many businesses could fail as a result of the proposed business rates revaluations.

“While a rates cap has been applied for the current year, the uncertainty for many local hospitality businesses in Orkney remains. It was disappointing, therefore, that the Cabinet Secretary appeared dismissive of their concerns about the way in which rateable values are assessed.

“These businesses are key to Orkney’s tourism sector. At present, however, those that invest and seek to grow risk being penalised. With rateable values focusing on turnover rather than profitability, there is a disincentive to grow your business. That will do little to help generate jobs, wealth and tax revenues.

“All eyes will now be on the Cabinet Secretary ahead of his statement next week. I hope he will take steps to ensure that pubs and hotels, a lynchpin of Orkney’s important tourism sector, are taxed more appropriately.”