Early business rate cut for small firms in Scotland

Small firms in Scotland will benefit from a significant reduction in business rates a year earlier than expected.

Under concessions to the Budget agreed last night in the Scottish Parliament, the Small Business Bonus Scheme will now come into effect in April 2009.

According to finance secretary John Swinney, the scheme will see around 120,000 small firms in Scotland cease to pay business rates, with a further 30,000 benefiting from reductions of 25-50%.

Both the Scottish Conservatives and Federation of Small Businesses Scotland (FSB Scotland) have claimed a part in gaining the concession.

"Overnight, Scotland will become one of most attractive places to start up or grow a business, and that will have a huge impact on Scottish economic growth over the lifetime of this Parliament," said FSB Scotland's Andrew Watson.

However, the Scottish Trades Union Congress disagreed, calling the decision "a mistake at a time when disadvantage and inequality are still rife in Scotland."

"There is scant, if any, evidence to support the proposition that the Scheme will boost growth in Scotland," warned general secretary Grahame Smith.