'Extreme disappointment' as Scottish Budget fails to help hospitality

Hospitality trade bodies have warned thousands of businesses will face a financial crisis next year due to a lack of support in the Scottish Budget.

More than 400 hospitality firms and workers had signed an open letter ahead of the announcement calling for an emergency 75% business rates relief to ease pressure on the sector.

However, the Scottish Government granted 100% rate relief to hospitality firms in the Scottish islands, capped at £110,000 per business, and froze business rates for mainland premises valued at less than £51,000.

Property experts Gerald Eve estimated medium and larger businesses will now see a £204m rise in their rates bills, which will increase in line with CPI September inflation.

The Scottish Tourism Alliance, UKHospitality Scotland, the Scottish Licensed Trade Association and the Scottish Beer and Pub Association said the government had “squandered a golden opportunity” to help the industry.

The group said in a statement: “The 100% rates relief which has been announced for hospitality businesses in our island communities is welcomed, given the economic disruption these businesses have experienced as a result of years of underinvestment in our ferry infrastructure. However, this measure falls very short of what has been expected. It is an extreme disappointment for tourism and hospitality businesses across Scotland.

“The lack of business support measures will see many thousands of tourism and hospitality businesses facing acute financial challenges in the next year, tipping many into crisis.

“It also entrenches the fact that it is now immeasurably harder to run a hospitality, leisure or tourism business in Scotland, than anywhere else in Britain.”

The government also announced the creation of a new 45% tax band for those earning between £75,000 and £125,140.

The top rate of tax, levied against those earning more than £125,000, will also rise by 1% next year to 48%.