Hospitality sector unites in call for 40% business rates support Scottish businesses disadvantaged for years over rates

Hospitality trade groups have united in a call for a reduction in business rates ahead of next week’s Scottish budget, highlighting the huge disparity in rates bills for pubs north of the border over the last three years.

In a joint Statement from the Scottish Beer & Pub Association, Scottish Licensed Trade Association, Scottish Hospitality Group, Night-Time Industries Association Scotland, and UKHospitality Scotland, they said support is vital in protecting jobs and ensuring investment.

They have pointed to the analysis of figures which show that hospitality businesses in Scotland have paid between 112% and 176% more in rates than those rated the exact same in England, due to the disparity in support from government over the last three years.

The sector is facing another double-whammy with the potential loss of the 40% discount for some businesses and astronomical increases in bills due to the recent revaluation, on top of the years of financial disparity between them and businesses in England. As a result, they are asking for continuation of the 40% relief on businesses, alongside the removal of the £51k cap.

Joint Statement:

“As representatives of Scotland’s hospitality and night-time economy, we are united in calling on the Scottish Government to deliver meaningful non-domestic rates (NDR) support in next week’s Budget. This has to be continuation and extension of the 40% for hospitality businesses and a removal of the £51k cap, alongside transitional relief for those hit by the recent revaluation.

“The Scottish Government has already rightly acknowledged that there is a fundamental issue with how the hospitality sector is rated, as evidenced by the ongoing review. Previous budgets have also recognised this challenge and provided targeted relief to help businesses cope, but they have been significantly less generous than those received by the same businesses in England – with some premises paying 176% more in Scotland over the last three years. The recent revaluation has compounded the problem, with many premises facing unjustifiable and disproportionate increases in their rateable values.

“These hikes come at a time when businesses are still grappling with rising costs and fragile consumer confidence. Without intervention, the impact will be severe—threatening jobs, investment, and the vibrancy of Scotland’s towns and cities.

“We urge the Scottish Government to act decisively by introducing a robust package of NDR support in the upcoming Budget, including transitional relief. This is essential to safeguard the future of Scotland’s hospitality sector while the review continues.”

The Scottish Beer & Pub Association

The Scottish Licensed Trade Association

The Scottish Hospitality Group

Night-Time Industries Association Scotland

UKHospitality Scotland

The following Business Improvement Districts have also backed the sector’s campaign for 40% support:

Adrian Watson, CEO, Abeerdeen Inspired BID

Roddy Smith, Chief Executive, Essential Edinburgh BID

Kyron Keogh, Chair, Let’s Go Glasgow BID

Lorraine Bremner McBride, Director, Inverness Business Improvement District

Andrew Spence, Chief Executive, BID4Oban

Mary Philip, Project Manager, BID Fort William

Lucy Harding, General Manager, Nairn Connects Business Improvement District

Sharon MacKay, General Manager, Dornoch BID.

Total Rates Payable – 23-24 to 25-26

RV (£)	England (£)	Scotland (£)	% increase
£18,000.00	£9,880.20	£20,975.29	112%
£35,000.00	£19,211.50	£45,318.00	136%
£55,000.00	£32,862.50	£88,550.00	169%
£75,000.00	£44,812.50	£120,750.00	169%
£100,000.00	£59,750.00	£161,000.00	169%
£125,000.00	£74,687.50	£206,375.00	176%
£150,000.00	£89,625.00	£247,650.00	176%
£200,000.00	£119,500.00	£330,200.00	176%

Reliefs available – 23-24 to 25-26

Region	FY 2023–24	FY 2024–25	FY 2025–26
England	75% relief (max £110k)	75% relief (max £110k)	40% relief (max £110k)
Scotland	No pub-specific relief	100% relief (up to £110k) for island pubs	100% for island pubs; 40% for mainland pubs ≤£51k (max £110k)

The trade bodies have also written to MSPs highlighting the issue.

Text of letter to MSPs:

Dear Members of Scottish Parliament,

Non-Domestic Rates support for Scotland’s Hospitality Businesses

Scotland’s hospitality and night time economy businesses are vital to the success of our rural tourism economy, as well as our town and city centres, providing employment, investment, and driving footfall.

The lower levels of business rates support provided to Scottish businesses over the last few years compared to their counterparts south of the border has resulted in a cumulative impact that is deeply concerning. 

Between 2023 and 2026 a small Scottish restaurant, pub, or café with a rateable value of just £18,000 would have paid some £11,095 more in tax over those three years than the comparable business in England. 

If we take the example of a small pub with a rateable value of £55,000 the Scottish business would have paid £55,697.50 more in tax than the same business in England over those three years, or with a rateable value of £100,000, the Scottish business would now be £101,250 worse off than the same business south of the border. 

For businesses with a greater footprint such as a city centre licensed premises, or a small hotel, the numbers are even worse, as the Scottish business with a rateable value of £200,000 would now be a staggering £210,700 worse off in just three years than the same business in England.

As representatives of Scotland’s hospitality sector and night-time economy, we are united in calling on the Scottish Government to deliver meaningful non-domestic rates (NDR) support in next week’s Budget.

The Scottish Government has already rightly acknowledged that there is a fundamental issue with how the hospitality sector is rated, as evidenced by the ongoing review.

Previous budgets have also recognised this challenge and provided some targeted relief to help businesses cope, however the fact remains that due to cumulative support differentials over the last three years Scottish small businesses are now significantly worse off than their counterparts in England.  However, the recent revaluation has compounded the problem, with many premises facing unjustifiable and disproportionate increases in their rateable values.

These hikes come at a time when businesses are still grappling with rising costs and fragile consumer confidence. Without intervention, the impact will be severe—threatening jobs, investment, and the vibrancy of Scotland’s towns and cities.

We urge the Scottish Government to act decisively by continuing the current 40% support package while removing the £51,000 RV cap and introducing a robust package of NDR support until the review of non-domestic rates is completed. This is essential to safeguard the future of Scotland’s hospitality sector while the review continues.

Ends

Contacts:

Paul Togneri, Scottish Beer & Pub Assoc. | ptogneri@beerandpub.com

Leon Thompson, UKHospitality Scotland| lthompson@ukhospitality.org.uk

Colin Wilkinson, Scottish Licensed Trade Assoc. | colin.wilkinson@theslta.co.uk

Stephen Montgomery, Scottish Hospitality Group | Stephen@scottishhospitalitygroup.com

Mike Grieve, Night-Time Industries Assoc. | mike@subclub.co.uk

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