UKHospitality Scotland warns of £69m business rates bill

Hospitality operators in Scotland could face a £69m business rates hit in 2026/27 without further support from the Scottish government in January’s Budget.

 

UKHospitality Scotland warned that rateable values could increase 23% on average across the sector following its analysis of the draft valuation roll from the Scottish Assessors Association.

 

The industry is predicting a £69m business rates increase if the existing 40% relief for Scottish hospitality properties below £51,000 rateable value is discontinued.

 

UKHospitality Scotland has subsequently written to the First Minister urging the Scottish government to pause the revaluation process and consider freezing rateable values at current levels.

 

The letter also outlined several case studies, including that of a small, rural pub, which was allocated a draft valuation of £24,700 – a 160% increase on its previous valuation of £9,474. This would take the pub out of the Small Business Bonus Scheme and increase bills to an unaffordable point.

 

Meanwhile, a rural hotel in West Scotland has seen its rateable value increase 40%, on top of a 40% increase in 2023, which pushes the site into the higher property rate.

 

UKHospitality is therefore calling for a permanently reduced business rates poundage for hospitality and leisure at a rate of 30 pence in the pound, which would be funded by greater support from the online economy.

 

Leon Thompson, executive director of UKHospitality Scotland, said: “Hospitality businesses across Scotland continue to be punished by the broken business rates system.

 

“This 23% average increase to rateable values will push up hospitality’s business rates bill by as much as £69 million. That’s simply not sustainable.

 

“There are businesses that have received their draft valuations and are seeing increases of 160% and higher. They’re working out what this will mean for their bills and are coming to the clear realisation that the scale of increases will be unaffordable.

 

“Without action, we will only see business closures accelerate, more jobs lost and Scottish communities continue to see the loss of much-loved local venues.”

 

It comes after several operators in England warned The Caterer of further job losses, price rises and an exodus of UK talent following the changes to business rates announced in last month’s Budget.