Retailers will not have to pay extra tax on larger stores in Scotland as the Scottish Parliament has blocked the proposed Large Retailer Levy.

The decision marks a victory for the Scottish Retail Consortium and retailers with stores in Scotland which had campaigned against the levy.

Retailers including Tesco, Marks & Spencer and John Lewis protested against the proposed business rate hike, forming campaign group Competitive Scotland.

Sainsbury’s boss Justin King had warned that the grocer would rethink its expansion plans in Scotland if the planned business rates hike for stores with a rateable value of more than £750,000 was implemented.

Fiona Moriarty, director of the Scottish Retail Consortium said: “Common sense has prevailed. Retail drives economic recovery and provides communities with jobs and services. Given the right support, it will help Scotland towards a secure and successful future. Allowing the levy to proceed would have endangered future jobs growth and investment.

“The proposed Large Retailer Levy would have cost the country far more in long term damage to investment than it would ever have raised.”

The SRC urged the Scottish Government to consult retailers about future proposals affecting the sector to identify and avoid potentially damaging policies.