Government should consider digital registry of businesses, report says

A report said the current system is based on properties rather than businesses.

The current database is one of properties rather than businesses (Dominic Lipinski/PA) (PA Archive)

The Scottish Government should consider creating a digital registry of businesses, a report has recommended.

The Fraser of Allander Institute at Strathclyde University carried out research into the Small Business Bonus Scheme (SBBS), but said challenges with data made conclusions difficult.

It said the database for the scheme is currently based on properties rather than individual businesses.

The SBBS provides relief from business rates for businesses under a certain size, with £279 million being spent on the scheme in 2020.

The report said: “It is exceptionally difficult to reach any definitive conclusions about the impact of the SBBS on the business base in Scotland.

“Challenges around data quality, identification of businesses and policy implementation (the bunching of businesses around policy thresholds) make it almost impossible for any systematic assessment of the impact of the SBBS to be undertaken on key issues such as employment, investment or business growth.”

Some £279m was spent on the SBBS in 2020 (Jane Barlow/PA) (PA Wire)

It recommended the government collect more information on businesses and consider a digital registry which is periodically updated.

Responding to the report, the Federation of Small Businesses (FSB) said the scheme should be modernised but not scrapped.

The FSB’s Scottish policy chairman Andrew McRae said: “Trading conditions have changed dramatically since this review was commissioned in 2019.

“Scottish local and independent businesses – loaded with debt from the Covid crisis – now face huge supply chain disruption and spiralling energy bills.

“There’s no doubt that the small business bonus has been a lifeline for many firms.

“Scrapping this relief would lead to the average small business in Scotland paying an additional £2,000 more in tax and some paying more than £7,000.

“This would undermine struggling high streets and make it more difficult for firms to survive cash flow difficulties.

“That’s why ministers should stick by their manifesto commitment and keep this relief, the cornerstone of their small business support policies.”

A Scottish Government spokesman said: “Over the last 14 years, Scotland’s business community has had to weather a global financial crisis, a decade of UK Government austerity, Brexit, a global pandemic and spiralling energy costs.

“During that time, we are proud to have supported more than 100,000 small businesses across Scotland with rates relief of up to 100%, saving them thousands of pounds a year.

“Scotland has had the most generous rates relief regime anywhere in the UK, despite regular comments suggesting otherwise.

“Going forward, it is essential that we continue ensuring we support businesses as best we can – that is why we commissioned this report in the first place.

“We will consider this report and its recommendations carefully.”