In its statement at Holyrood on Wednesday 4 December, the Scottish Government announced a number of measures to “support small businesses”, including Non-Domestic Rates support of 40% for Hospitality businesses.
UKHospitality Scotland executive director Leon Thompson said: “The introduction of 40% business rates relief is very positive for venues that are eligible for this support.
“I’m pleased the Scottish Government has acted on UKHospitality Scotland’s calls for this much-needed support, which had clear cross-party backing.
“With costs mounting for venues across Scotland, this support could be a lifeline for some businesses making tough decisions about whether to invest, take on more staff, or even shutting the doors for good.”
The Scottish Government also announced it would freeze the Basic Property Rate, which is charged to properties with a rateable value up to and including £51,000, at 49.8p.
Impactful contributions
It added the measure would “support small businesses” and marked the lowest rate for the seventh year in a row, adding it would also provide 100% relief for businesses on Scottish islands.
Thompson said these were both “positive measures”, but warned there were around 2,600 businesses that would not be eligible for relief.
He continued: “They face a double whammy of increased employer taxes and an inflationary rise in their higher level of business rates in April.
“This will seriously threaten their ability to support jobs, and we have to recognise that these businesses employ more than half of Scotland’s hospitality workforce.
“Hospitality’s ability to provide jobs for everyone is one of our impactful contributions to Scotland and I am concerned about the unintended consequences those tax rises will have on the ability of those unsupported businesses to support employment.
“I’m grateful the Scottish Government has acted to introduce relief, and I look forward to continuing discussions with them throughout this Budget process, including on how we can ensure major employers in hospitality are supported.”
Perfect storm
Cabinet Secretary for Finance & Local Government Shona Robison also announced the continuation of the Small Business Bonus Scheme (SBBS).
Scottish Beer & Pub Association (SBPA) CEO Emma McClarkin said: “The support on Business Rates announced today by the Scottish Government is greatly welcomed by our sector and much-needed.
“It is still an uphill challenge for the sector with not every pub receiving the support, as well as the proposed increase in National Insurance Contributions disproportionately impacting hospitality businesses, adding on an average £4,700 in costs to each pub operating across the country.
“However, the 40% relief announced today will hopefully mean fewer closures over the next year and give the sector some added confidence moving forward.
“Scotland’s pubs have been hit with a perfect storm of increasing costs and headwinds such as a growing regulatory burden and inflationary pressures which have combined to see net income for the average pub drop by 54% since 2019, and net margin drop from 8.5% to 3%.
“The lack of support on rates in previous years created a situation where pubs in Scotland were closing at twice the rate of those in England and support on this was our number one ask in our budget submission – we’re delighted they’ve listened to our calls.”
