Scottish hospitality venues 'face closure' without business rates relief

Some Scottish hospitality businesses are set to pay tens of thousands more in business rates this year compared to similar firms in England and Wales, a trade body has warned.

UKHospitality Scotland said many operators were having to make “hard financial decisions” to survive.

Scottish firms have not benefitted from any business rates relief since July 2022, while those in England and Wales could be eligible for a discount of up to 75% off their bills for the coming financial year.

More restaurants, pubs and hotels will fail unless a similar level of help is introduced in Scotland, UKHospitality Scotland executive director Leon Thompson has warned.

The trade body has written to the Scottish Government calling for the urgent introduction of short-term business rates relief to help venues survive as they battle rising costs.

“While no business in the UK is free from the effects in inflation, it’s becoming clear that the inaction and lack of business rates relief from the Scottish Government means we are falling quite sharply behind England and Wales,” said Thompson.

“For example, rateable values in Scotland appear to have risen almost across the board in Scotland, while the opposite seems to be true in England. We’ve heard from members that many are set to pay tens of thousands more in business rates here, compared to similar businesses in England.

“This is not sustainable and will have long-term ramifications for Scottish hospitality. If running a business in Scotland permanently becomes more expensive, with no relief for businesses, we could see investment suddenly diverted away from the sector and a loss of skilled workers in Scottish hospitality.

“This has to be avoided at all costs. We urgently need to see the Scottish government introduce business rates relief at or near the levels in England and Wales, otherwise businesses will fail. In the long-term, the lack of parity we see in the business rates system between nations underlines its ineffectiveness and the need for complete root and branch reform.”

The Scottish hospitality sector employs around 200,000 people and contributes £9b to the economy.

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