Removal of full rates relief ‘could spell the end for many’
TRADE groups have hit out at the Scottish Government’s decision to resume business rates bills for hospitality businesses from April 2022.
Finance secretary Kate Forbes announced yesterday (9th December) that the two-year business rates ‘holiday’ given to hospitality businesses due to the pandemic will end at the beginning of the new fiscal year, with hospitality businesses set to receive 50% rates relief for the first three months of the 2022/2023 fiscal year (April to June 2022), capped at a maximum of £27,500 per ratepayer.
Forbes said the measure, announced as part of the Scottish Budget, would “prevent a cliff edge for businesses”.
But trade groups have hit out at the move, saying the reintroduction of business rates bills will hammer hospitality businesses, which are already facing reduced festive trade. Yesterday, Public Health Scotland urged people to postpone Christmas parties in light of the Omicron variant; and first minister Nicola Sturgeon is due to give an update on the pandemic today (10th December).
Leon Thompson, executive director at UK Hospitality Scotland, said the Scottish Budget has “failed hospitality businesses across the country”.
“It provides little hope to businesses at risk of financial free fall as they face a much-reduced Christmas and New Year trading period due to concerns over the spread of Omicron,” he said.
“The extension of business rate relief of 50% from April to June 2022 simply moves the financial pressures a little further down the line and does nothing to eliminate the very real challenges that our businesses face. With increased cancellations, many businesses face stark months ahead.
“Many had pinned their hopes on the Budget statement and will now be facing very difficult choices.
“Businesses need support, not further measures that will limit opportunity for recovery – whenever they might come.”
Stephen Montgomery, spokesperson for the Scottish Hospitality Group, said: “The business rates relief announced may be helpful for a short period for some hospitality businesses –but the cap cripples many, and the significant cost challenges for hospitality will not end by summer next year.
“It is a fact that Scottish hospitality businesses are facing a cliff edge of rising costs – with inflation, supplier price increases, debt levels and other costs rising across our industry.
“The removal of rates relief next year takes away vital breathing space and could spell the end for many hard-pressed Scottish hospitality businesses.”
The Scottish Beer & Pub Association said the rates relief “falls short of what many pubs require”.
“We have been enormously grateful for the relief previously given by Kate Forbes and the Scottish Government, but this effectively creates two cliff edges moving forward into the new year,” said a spokesman for the trade group.
“The Scottish Government should have, at the very least, matched the support offered by the UK Government of 50% discount for the whole of 2022/23 – not just the first three months.
“With the Omicron variant raising fears and impacting on consumer confidence, our sector will require additional targeted support going forward to avoid losing any more of Scotland’s much-loved pubs.”
Graham Howarth, partner at property consultancy Gerald Eve’s Glasgow office, described the Budget measures as “beyond disappointing”.
“As we enter into another unknown period with the potential of reinstated or additional restrictions, Kate Forbes and the SNP government have failed to deliver a Budget that works for businesses,” he said.
“The announcement of 50% business rates relief for retail, leisure, hospitality and aviation businesses for the first three months of 2022/23 is welcome but, again, is a significantly worse deal than offered to similar businesses in England, and is at odds with the SNP’s stated pledge of offering the most competitive business rates package anywhere in the UK. The devil is also in the detail, with this relief capped at £27,500 per business.
“For businesses hoping for a lifeline following pandemic restrictions and further uncertainty on the horizon, this is beyond disappointing.”