Plans by the Scottish Government to review rates have been welcomed but concerns have been raised over a hike in the amount large firms pay.

The review, announced yesterday by Finance Secretary John Swinney, is meant to ensure that Scotland’s business rates system “minimises the barrier to investment”.

However, Swinney said he proposed a “modest increase” to the Large Business Supplement in order to maintain the Small Business Bonus Scheme, which offers rates cuts for small firms.

Scottish Retail Consortium director David Lonsdale said he is “delighted” the Government had listened to calls for “fundamental reform of business rates”.

He added: “A fundamentally reformed rates system and a substantially lower tax burden would increase retailers’ confidence about investing in new and refurbished shop premises, create more jobs and help revive high streets.”

However Lonsdale warned: “The hike in the large firms rates supplement is concerning, and it now appears that larger firms operating in Scotland will be paying more in business rates than firms operating in comparable premises down South.

“That would be a departure from the pledge to keep rates here at the very least in line with the rest of the UK, and undermines claims to have the most competitive rates regime in the UK.”

The Westminster Government is currently conducting a review of business rates for England and Wales, with George Osborne due to report the outcome in next March’s Budget.

The Government is also proposing to devolve powers to local councils and mayors to set rates on a local level.