Finance secretary says discount will “prevent a cliff-edge for businesses”
Trade group SLTA calls for full reform of the rates system
HOSPITALITY businesses will receive 50% rates relief for the first three months of the 2022/23 tax year, the Scottish finance secretary has announced.
Delivering her Scottish Budget today (9th December) finance secretary Kate Forbes said hospitality businesses will receive a 50% discount on their rates bills in the first three months of the next fiscal year, capped at a maximum of £27,500 per ratepayer, “to prevent a cliff edge for businesses”, before full rates resume. It comes after a two-year rates ‘holiday’ for hospitality businesses due to the pandemic.
The poundage rate will be set at 49.8p, which Forbes said was the lowest in the UK and represented a below-inflation uplift for the fourth year in a row.
Businesses with a rateable value below £15,000 will continue to pay no rates next year.
There will be no change to income tax rates, with starter and basic rates increasing in line with inflation, while higher and top rates are frozen at the current levels.
The 50% rates relief was welcomed by Scottish Licensed Trade Association managing director, Colin Wilkinson, who said it was “a welcome step towards aiding our recovery”.
“However, as we have previously pointed out, there is an urgent need for a change to the current system of business rates as it is clear that the current system penalises hospitality businesses and is no longer fit for purpose in a world of online sales and the advantages that some sectors, supermarkets for example, have enjoyed during the lockdowns and periods of restricted opening for hospitality,” said Wilkinson.
And Scottish Tourism Alliance chief executive, Marc Crothall, said businesses around Scotland would be “underwhelmed” by the announcements.
“Today’s budget announcement sends a clear and stark message to Scotland’s tourism industry that the short-term extension of business rates relief is effectively the one last lifeline of support available,” said Crothall.
“The cliff edge the finance secretary refers to will only be delayed until June 2022 when the impact will be felt hard by businesses across all sectors within our industry.”
Other announcements included £225 million for Skills Development Scotland to help tackle skills shortages across the country, £370m for enterprise agencies and £50m for tourism agency VisitScotland.
