HOSPITALITY and tourism trade groups have upped the ante in their bid to block proposed business rates hikes, urging the Scottish Government to step in before new rateable values come into force on April 1.
Scottish Tourism Alliance (STA) chief executive Marc Crothall has called on the First Minister to personally intervene on behalf of the hospitality industry to curtail the “significant increase” in business rates, which are due to come into force on April 1.
In a letter to Nicola Sturgeon, Crothall claims that should the Scottish Assessors draft rateable values for 2017 be applied, “the net result will almost certainly see many businesses struggle with impossible trading conditions, leading to unsustainable staffing levels and a reduction in investment and productivity”.
While many operators in the licensed trade will see their rates bill either reduced or maintained, some operators face steep hikes.
Crothall highlighted a number of venues, including Fort Charlotte Guest House in Lerwick, Helgi’s in Kirkwall and Duke’s Corner in Dundee, whose rateable values are set to rise by 160%, 150% and 240% respectively.
The STA boss said the Scottish Government is now “allowing the Scottish Assessors Association to set unsustainable rateable values for tourism businesses based on a method which is not transparent and appears flawed and unfair”.
“On top of the disproportionate rates increases for some hospitality and licensed trade businesses, there are a range of other new costs and increasing costs to businesses such as the Apprenticeship Levy, the rises in the National Living Wage in addition to pension and auto-enrolment costs,” said Crothall.
“The cost of food and drink is also rising as a direct result of the fall in the pound.”
The STA’s plea to the Scottish Government coincides with the launch of campaign organised by late night operators in Aberdeen seeking to protect businesses in the north east from a rates hike.
On-trade members of Unight, a partnership of Aberdeen late night venues, Police Scotland and Safer Aberdeen, have released an open letter calling on the Scottish Government to intervene and reconsider increases in business rates.
In the letter, Unight chair Stuart McPhee of Aberdeen venue Siberia Vodka Bar highlighted rateable value increases of up to 300% for some venues in the city.
“We cannot stand idly by and allow this to go past unchallenged, and our rateable values underpin other costs such as licensing fees and in some cases could cause other bills such as TV subscriptions to increase,” said McPhee.
“These exponential increases threaten to weaken an already decimated night time economy within a city that has endured a tenured economic downturn and has already seen some hospitality venues go out of business or into administration.”
It is understood that Unight’s letter was presented to Scottish Government cabinet secretary for finance and the constitution Derek Mackay at a meeting with Aberdeen business leaders held at the Aberdeen and Grampian Chamber of Commerce on Friday (January 27).
When asked by SLTN about a sizeable number of on-trade businesses which may be forced to close as a result of the hike in business rates, a Scottish Government spokeswoman said: “We value the licensed trade sector, which makes an important contribution to the Scottish economy. It has always shown itself to be resilient – and new figures show that pubs and restaurants in Scotland are less at risk of insolvency than the UK average. Scotland’s pubs were also found to be ‘the most stable in the UK’ while Scotland’s restaurant sector put in the second best performance.”