The measures introduced in the Scottish Budget will provide 40% business rates relief for venues with a rateable value up to £51,000, but this leaves more than 2,500 hospitality businesses ineligible for support.
Combined with increases to the Intermediate and Higher Property Rate, these unsupported businesses will see their rates bills increase by thousands year-on-year.
Rather than support the sector, the measures entrench Scottish hospitality’s lack of competitiveness with equivalent venues in England, who will receive 40% rates relief up to £110,000.
A typical local pub, which just misses out on relief, will pay £12,000 more in rates compared to an equivalent business in England. For a town centre restaurant, it will be £17,000 more. For a rural hotel, they will pay £25,000 more.
UKHospitality Scotland is calling for the Scottish Government to expand the 40% business rates relief so all hospitality businesses benefit.
Leon Thompson, Executive Director of UKHospitality Scotland, said: “The lack of business rates relief has been the thorn in the side of Scottish hospitality for several years, and there was enormous optimism when the Scottish Government announced relief measures in its Budget in December.
“That optimism quickly turned to despair for the thousands of businesses that realised they would be ineligible and that their bills would actually increase next year. For the third year in a row, many Scottish venues will also be tens of thousands worse off than their English competitors, too.
“It’s clear the Scottish Government recognises the importance of hospitality to Scotland by its introduction of some relief, but the scheme unfortunately excludes medium and larger employers and businesses with plans to invest, which have now been put on ice.
“We saw just this week how hospitality was the biggest driver of economic growth in November and I would urge the Scottish Government to harness that potential by supporting hospitality through a universal 40% business rates relief.”
