​Business Rates Relief Announced for Hospitality in Scotland

UKHospitality has cautiously welcomed the Scottish Government’s announcement of a 40% business rates relief for hospitality venues with a rateable value of up to £51,000. The relief, set to take effect during the 2025-2026 fiscal year, will apply to businesses paying the Basic Property Rate. This measure aims to ease financial pressure on smaller establishments within the sector.

However, the relief package leaves significant gaps, with approximately 2,600 hospitality businesses in Scotland ineligible for the discount. These larger operators, excluded due to their higher property valuations, are bracing for a challenging financial landscape.

Beyond the absence of rate relief, these businesses face rising employer National Insurance contributions following measures announced in the wider UK budget and inflationary increases to intermediate and higher property rates detailed in the Scottish budget.

Industry Concerns Over Long-Term Impact

Leon Thompson, Executive Director for UKHospitality Scotland, voiced his concerns over the “double-whammy” of escalating costs, particularly for businesses left out of the relief programme. “This will seriously threaten their ability to support jobs, and we must recognise that these businesses employ more than half of Scotland’s hospitality workforce,” he stated.

Thompson emphasised the sector’s crucial role in providing employment across Scotland, warning of the unintended consequences these tax increases may have on jobs and livelihoods. He acknowledged the Scottish Government’s efforts in introducing targeted relief but called for broader support, especially for larger employers.

“I’m grateful that the Scottish Government has acted to introduce relief,” Thompson remarked. “I look forward to continuing discussions with them throughout this budget process, including how we can ensure major employers in hospitality are supported.”

Balancing Support and Sustainability

The announcement highlights the tension between targeted relief for smaller businesses and the needs of larger operators, which often serve as significant employers. With the hospitality sector still recovering from recent economic shocks, the effectiveness of this relief—and the potential fallout for those excluded—will likely remain a point of debate.

As the budget process unfolds, industry stakeholders and policymakers face the challenge of balancing fiscal sustainability with the urgent need to safeguard jobs and the long-term viability of Scotland’s hospitality sector.