No rates relief for mainland Scottish hospitality businesses but island businesses get 100% NDR relief – DRAM Scotland

Hospitality businesses on Scotland’s islands will get 100% non domestic rates relief capped at £110k but the rest of Scotland’s hospitality businesses will get no relief whatsoever, although poundage has been frozen for all businesses up to a value of up to £51k, announced SNP Finance Secretary Shona Robison in her budget today.

In England hospitality businesses received a 75% rates relief package and Wales has revealed a 40% relief package for hospitality. But only Scottish island businesses will get relief in Scotland due to the “unique challenges ” they faced Shona Robison said.

She said. “The number one we’ve heard ask on Non Domestic Rates  has been calls to freeze the poundage. We will freeze the poundage on the basic property rate. Protecting businesses with a RV up to and including £51K and we will maintain the small business scheme.”

However when it came to hospitality she said, “For the hospitality sector we recognise the pressures they face and that why we will work through the new deal for business group to take forward  two actions to be implemented our budget for next year.

“We will work with the sector to explore long term targeted solutions and better promotion of existing reliefs rather than relying on short-term steps, that do little for future sustainability  and secondly we will examine with the Scottish assessors the valuation methodology for the hospitality sector which they say is not reflective of the experiences of these businesses. In addition in recognition of unique challenges faced by island hospitality businesses capped £110k.

Over the past few months Scottish hospitality trade bodies have lobbied government with regard to the financial pressures that the industry is under, but their pleas have fallen on deaf ears.

Stephen Montgomery, Director of the Scottish Hospitality Group said, “We are sorely disappointed that the Scottish Government has not delivered new emergency support for Scottish hospitality.

“Unless a hospitality business is located on the islands, this Budget offers no new support to Scottish hospitality to survive the unprecedented challenge of rising costs, inflation, and the legacy of the pandemic.

“The very real implication is that many Scottish hospitality businesses will struggle to survive, and customers will see prices increase. This will be a bitter pill to swallow for thousands of Scottish hospitality businesses, given English hospitality businesses will be benefitting from a 75% business rates discount for the next year.

“Our attention will now be focused on helping those hospitality businesses survive what will be a very challenging year to come.

“However, we welcome the Scottish Government’s commitment to exploring a long-term, fairer deal for hospitality on business rates. It is a ray of hope in an otherwise disappointing day for Scottish hospitality. This is a golden opportunity to deliver a fairer deal for Scottish hospitality once and for all. We have been engaged with the New Deal for Business Group for a number of months and it is time that the Scottish Government’s actions matched their words. The Finance Secretary has committed to introducing a long-term, fairer deal for Scottish hospitality at next year’s Budget. We will hold her feet to the fire to make sure she delivers on this promise.”

NTIA Scotland expressed profound disappointment  and said, “As a direct result of the Scottish Government’s failure to pass on the 75% business rates relief available to businesses in England, closures of Scottish hospitality businesses are now running at double the rate of that in England.

“It is now clear that the Scottish Government’s so-called ‘New Deal for Business’ is little more than a talking shop for “Big” Business to lobby for maintenance of the poundage rate, while Scotland’s small businesses are betrayed and left up to £100,000 a year worse off for the third year in a row compared to their colleagues south of the border.“

“Whilst long term reform of business rates would be welcome, it is sadly the case that for too many businesses, this will be too little too late, as they have been unable to survive the ‘hostile environment’ businesses currently face in Scotland.  And sadly, for those that do survive, cuts to investment, staffing levels and jobs will now be inevitable.”

Hospitality operator Dean Banks  whose businesses include Haar St Andrews, Dulse Edinburgh, Dean Banks at the Pompadour, The Forager Dollar and  Dune St Andrews said, “I am massively disappointed in the Scottish Government.

“We were asking for fairness with what England is offering and the fact that the funding to pay for that has been put in place already. That funding is the taxes I, my staff and my businesses have paid. It’s absolutely shocking that this is the outcome. I’m shocked and disgusted.

“I hope that many of us business owners and staff within the industry come together, demand change – how can anyone in our industry ever vote SNP or Green again?

“This will cost businesses, livelihoods, even lives. People will see their passion, what they have worked for their whole life, taken from them.

It is sickening. I’m a proud Scot but these people just don’t care about our country.”

While Barry McEwan, business rates partner in property expert Gerald Eve’s Glasgow office, said, “The Finance Secretary’s business rates measures are expected to help some of Scotland’s smallest ratepayers to the tune of around £37 million, but they do nothing for medium-sized and larger companies who must now find an extra £204 million to fund an inflationary hike in their bills.

“The increase in business rates from next year will be the highest annual rise in more than 30 years and couldn’t come at a worse time for firms who are trying to recover from the pandemic, economic uncertainty, soaring inflation and the cost-of-living crisis.

“The decision creates a disadvantage for Scottish businesses because rates bills here will be higher proportionally compared to their English counterparts. Add to that the lack of additional support for retail, leisure and hospitality businesses, which was extended in England for another year, and it is no surprise so many Scottish ratepayers are struggling to compete.

“We welcome the announcement of the Government to introduce Relief to combat the unique challenges faced by the hospitality industry in Island communities. With 100% relief for hospitality subjects in islands communities, capped at £110,000.”

Chancellor Jeremy Hunt also announced last month at the Autumn Statement that a 75% discount for the retail, leisure and hospitality sectors would be extended for 12 months. The Scottish Government scrapped a similar scheme last year.

The budget also a new tax band. The advanced band will be set at 45% and will be placed on those earning more than £75,225. The top rate of tax, levied against those earning more than £125,000, will also rise by 1% next year to 48%. In other areas of tax, the three lowest rates will see no increase to their rates while the starter and basic rate bands will increase by the level of inflation.