Scottish pubs to be hit with ‘staggering increases’ to business rates

Scottish pubs are bracing for an 86% increase to business rates over the next three years.

 

According to the latest analysis from UKHospitality Scotland, the average pub in Scotland will be hit with a £36,523 bill increase as a result of the rise in rateable values, the ending of 40% relief and lack of further support from government.

 

In 2026/27, a Scottish pub will pay £26,385, an increase of £11,509 (77%) on the current average of £14,876; in 2027/28, it will pay £27,045, an increase of 82% compared to today; and in 2028/29, it will pay £27,721, an increase of £12,845 (86%) compared to the current average.

 

Meanwhile, hotels also expect rates to rise by an average £68,007 over three years.

 

In 2026/27, a Scottish hotel will likely pay £114,484, an increase of £19,783 (21%) on the current average of £94,701; in 2027/28, it will pay £117,346, an increase of £22,645 (24%) compared to today; and 2028/29, it will pay £120,280, an increase of £25,579 (27%) compared to the current average. 

 

Leon Thompson, executive director of UKHospitality Scotland, said: “These are staggering increases and demonstrate the significant cost challenge facing Scottish hospitality businesses.

 

“This comes on top of increased costs of employment, energy, food and drink, and will be simply unsustainable for hospitality businesses to handle.

 

“These are not sums that can just be plucked out of thin air. The Scottish government can’t expect the local pub to discover an extra £11,000 in the next two months to pay these significant increases.

 

“We have already seen cancelled investment, job losses and business closures across Scotland, and the scale of these rates bills make it even more likely that this will get worse.

 

“The Scottish government has already committed to passing on any additional funding it receives from the UK government, but I urge it to go further and work with us to provide further support to avert these significant increases.”

 

Earlier this month, UKHospitality Scotland expressed frustration towards the Scottish Budget, which it said “missed the mark spectacularly on business support”.

 

The warning comes as pressure mounts on government to share more details on the business rates support package for pubs, which the Treasury hinted at in early January.

 

While there had been rumblings the support could be applied to other sectors within hospitality, chancellor Rachel Reeves indicated that previously pledged business rates relief would not extend beyond pubs, while speaking at the World Economic Forum in Davos last week.

 

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