ScotGov has announced a stronger non-domestic rates relief package for Scottish licensed hospitality and music venues.
Revealed today (Feb 12th), the additional Scottish Budget funding means that rates relief for eligible premises liable for the basic and intermediate property rates will rise to 40% for the next three years, subject to a £110,000 cap per business.
Announced as part of a budget update package supported by Scottish Liberal Democrats, the new money is presumed to be a consequence of the extra NDR reliefs introduced south of the border, coming to Scotland under the Barnett formula for government spending.
Welcoming this increased level of support, Paul Togneri of the Scottish Beer & Pub Association said: “This increase in business rates support is a welcome boost for Scotland’s pubs and will provide some much‑needed breathing space at a time when many venues are under real strain.
“The confirmation that it will also be for three years gives the sector some confidence moving forward.
“However, it’s important to recognise that the retained state aid cap means many pubs will still be unable to fully benefit from today’s announcement,” said Togneri.
“Longer‑term, reserved issues also remain a concern. Pubs are still being hit by sky‑high energy costs, a punishing VAT burden, and some of the highest beer duty rates in Europe,” he stressed.
“Similarly, there must be a permanent solution to the unfair rates burden and not just year-on-year reliefs. These pressures continue to hold back investment, growth, and the ability to keep prices affordable for customers.”
UKHospitality Scotland executive director Leon Thompson said: “This increased relief is positive news and will help soften the blow for many licensed hospitality businesses
“UKHospitality Scotland has been clear that urgent support was needed for the sector, and it’s clear the Scottish Government has acted as a result of our engagement.
“This is a good example of how the Scottish Parliament can make a positive difference to businesses, when political parties work together,” said Thompson.
The Scottish Hospitality Group, while welcoming this ‘limited progress’ on business rate reliefs for smaller licensed hospitality businesses, repeated its call for the rate increases to be halted altogether.
“We appreciate Lib Dem Jamie Greene negotiating some further limited reliefs for licensed hospitality, however, we believe the only way to avoid an economic catastrophe is to halt any rates increases whilst the methodology review is underway,” said the SHG’s Stephen Montgomery.
“Inflation busting rate rises will still hammer licensed hospitality in Scotland, especially for larger businesses. Many of these businesses employ dozens, sometimes hundreds of staff, support local supply chains and generate significant tax revenues. Yet they have again been left out of any sort of meaningful relief.
“The reality is that you do not need to be a large venue, to have a rateable value of over £100,000,” said Montgomery.
“Many single venues fall into that category without being ‘large’ operators. So, we must therefore ask why are they being penalised? Do they not matter too, or are they simply expected to absorb yet another financial blow without support?”
Similarly, the Scottish Licensed Trade Association welcomed the extra support package announced by Finance Secretary Shona Robison, noting that it only came after ‘intense lobbying’ by the sector and other political parties.
The SLTA’s Colin Wilkinson stressed: “It must also not be forgotten that many larger businesses will see no support coming their way from today’s announcement and yet these businesses still face the same challenges, including extortionate increases in their rateable values, as the rest of the sector.”
The SLTA’s recent Market Insight Report has highlighted the continued challenges facing licensed hospitality.
“A combination of costs rising significantly above inflation and consumers with lower disposable incomes adds up to a very difficult market for one of Scotland’s key industries and major employers,” said Wilkinson.
“One of our biggest challenges is a higher cost base, as hospitality businesses in Scotland face higher rates and energy charges than our counterparts across the rest of the UK. Our report highlights that over 84% of respondents do not think the economic policies of the Scottish Government are aligned to growing their businesses.
