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No rates relief for Scottish hospitality

Published:  28 February, 2024

The Scottish Budget for 2024-25 was passed unchanged at Holyrood yesterday (27 February), with hospitality businesses north of the border hanging in the balance.

It confirms that Scotland will be at a competitive disadvantage to England – in November 2023, a 75% business rates relief was introduced by chancellor Jeremy Hunt.

Owners and trade bodies alike hoped the Scottish government might reconsider its stance on business rates ahead of the budget.

“The Scottish Budget passing, unchanged, is the clearest sign yet that the Scottish government has decided to abandon its self-proclaimed reset with business,” said Leon Thompson, executive director of UKHospitality Scotland.

“Businesses up and down the country, across hospitality, leisure and tourism, have put forward the strongest possible evidence that the lack of business rates support is stifling growth, deterring investment, reducing trading capacity and, ultimately, forcing businesses to close,” he added.

According to the Fraser of Allander Institute (FAI), 10,000 hospitality businesses, which are ineligible for the small business bonus scheme, will be left ‘unsupported’ without a rates relief.

In December, the Scottish Beer & Pub Association (SBPA) and the Scottish Licensed Trade Association (SLTA) issued a joint appeal to support the sector after it emerged English businesses would receive a rate reduction.

Pubs outside Scotland benefited from the reduction last year, offering some relief to businesses dealing with mounting overheads and costs. However, the Scottish government chose not to pass on the reduction. This resulted in permanent closures in the sector accelerating at double the rate in Scotland (1.7%) than in England (0.75%), the two associations argue – and are now calling on Holyrood to pass on funding to Scottish hospitality.

“The failure to pass on a rates relief last year was a devastating blow for Scotland’s pubs and bars and has resulted in a record number of permanent closures,” the SBPA and SLTA said in a joint statement.