Maurice Taylor, founder and chief executive at leading independent hotel management company Chardon Management, has said that uncertainty over Scotland’s future tax regime is stifling hotel investment in Scotland, and, in Chardon’s case, resulting in plans to expand significantly south of the border in 2013.
Taylor notes that hotel development in Scotland is presently limited because of the degree of uncertainty surrounding the likely tax regime after next year’s independence referendum:
“Commerce does not like uncertainty; but that’s the situation within which we find ourselves in Scotland at the moment, which is why Chardon is increasingly looking further afield for business opportunities.”
Tax record results in caution amongst property investors
Taylor suggests that the Scottish government’s track record on taxation has led to a mood of caution amongst investors in the property sector, pointing out that whereas the 2007 property rates were phased in over five years at a 20% increase each year in England and Wales because they coincided with the start of the economic downturn, the Scottish government instead opted to use its new powers to raise taxes by the full rate immediately.
“Whilst Scotland had the opportunity to phase in these new rates, the government chose instead to hit every business hard right away, so there is a degree of nervousness amongst investors that, if history was to repeat itself, businesses in Scotland could find themselves subject to higher taxation than elsewhere in the UK in the event of a yes vote in the independence referendum.
“Hotel investors have the whole world within which to invest, so why risk their investment in a small country where there is uncertainty about the future tax regime?”
Chardon manages 35 hotels and several health and fitness clubs throughout the length and breadth of the UK whilst its own brand portfolio comprises: La Bonne Auberge; Limelight Bar & Grill; Triangle Health and Fitness; Tri Health & Beauty and Hoteldeals.co.uk