Scottish hospitality facing up to 70% higher business rates than in England

A trade body has warned that some Scottish hospitality businesses could pay up to 70% more in business rates than their English counterparts if they are denied business rates for a third year in a row.

UKHospitality Scotland (UKHS) has called on the Scottish Government to introduce at least 40% in business rates relief for hospitality businesses, similar to that in England.

Analysis by the trade body says Scottish hospitality businesses will be significantly worse off than English businesses if the Scottish Government does not act to introduce business rates relief in its budget.

The UKHS says a local pub would pay £6,000 more per annum, 66% more than an equivalent business in England, if ministers do not introduce the relief rates.

They said a town centre restaurant would pay almost £10,000 more, also 66% more than an equivalent business in England.

Hotels would pay £26,000 more, 70% more than hotels in England.

The trade body has said funding should be allocated through the Barnett formula – a mechanism used by the Treasury in the UK to adjust automatically the amounts of public expenditure allocated to Northern Ireland, Scotland and Wales.

Introducing at least 40% business rates relief for hospitality businesses could be the difference between venues choosing to employ more people and making investments, or abandoning those plans in order to survive

Leon Thompson, UKHS

It is also asking ministers for a clear roadmap to full business rates reform, and to fulfil its long-standing commitment to reduce the Higher Property Rate to fall in line with the rate in England.

Leon Thompson, executive director of UKHS, said: “Scottish businesses need business rates support from the Scottish Government, especially after they have missed out on relief measures in the past two Scottish budgets.

“Venues will continue to find themselves tens of thousands of pounds out of pocket, compared to their English counterparts, if this happens again.

“This time, it will hit even harder when combined with billions more costs hitting businesses in April through employer NICs.

“Introducing at least 40% business rates relief for hospitality businesses could be the difference between venues choosing to employ more people and making investments, or abandoning those plans in order to survive.”

He added: “Hospitality has so much potential to deliver for Scotland economically, socially and culturally.

“I know the Scottish Government recognises this and I hope that it chooses to implement some business rates support for our businesses, which is so crucial for them to both survive and thrive into the future.”

The Scottish Government highlighted that its Small Business Bonus Scheme (SBBS) is available to businesses where the combined rateable value of their premises is £35,000 or less and the values of individual premises are £20,000 or less.

The 2024-25 Scottish Budget delivers a competitive non-domestic rates regime including the lowest poundage in the UK for the sixth year in a row, and a package of reliefs worth £727 million as at June 1 2024

Finance secretary Shona Robison

It estimated that around half of the properties in Scotland’s retail, hospitality, and leisure sectors will be eligible for 100% relief in 2024-25.

Finance Secretary Shona Robison said: “The 2024-25 Scottish Budget delivers a competitive non-domestic rates regime including the lowest poundage in the UK for the sixth year in a row, and a package of reliefs worth £727 million as at June 1 2024.

“Our Small Business Bonus Scheme remains the most generous of its kind in the UK.

“Decisions on non-domestic rates for next year will be considered in the context of the Scottish Budget 2025-26.”