No big wins for the Retail, Leisure or Hospitality sectors, despite calls for urgent action.
Prior to Wednesday’s 2024/25 Scottish budget, the Finance Secretary Shona Robinson stated that it would “lay the foundations for long-term success”.
Would this statement ring true for the thousands of Scottish business rates payers who are already feeling the burden of rising business rates, inflation, and a general increase in the cost of living?
Both the Scottish Hospitality Group (SHG) and the Night-Time Industries Association (NTIA) were calling for urgent action to support the industry with rates reductions.
The SHG had demanded that the Scottish Government “do the right thing” and reduce the business rates poundage to 35p for all licensed hospitality premises, with no cap.
Now the Budget has been delivered, there is no doubt that the RLH sector in particular will feel Shona Robison’s promises fell short of expectations, given their request for a reduced business rates poundage did not materialise.
A slight improvement from last year’s budget is that the Scottish Government has decided to replicate the relief scheme proposed in England for 2025/26. This will see a 40% discount in business rates (100% for properties located on the Scottish Islands) up to a cash cap of £110,000 per business. However, unlike England, this relief applies only to the Hospitality sector and excludes retail.
Similar to England, the basic rate poundage for properties with a RV below £51,000, will remain frozen at 49.8p. However, the intermediate and higher rates will see inflationary increases, meaning most large businesses will have significantly higher 2025/26 bills.
The Small Business Bonus Scheme and the Business Growth Accelerator reliefs will be maintained along with Day Nursery and Fresh Start reliefs.
Interestingly, following the devolution of rates relief in Scotland to local councils, Shona Robinson also announced that from 1 April 2025, the Scottish Government will allow councils to retain 50% of additional NDR revenue raised from the use of their anti-avoidance powers under the Non-Domestic Rates (Miscellaneous Anti-Avoidance Measures) (Scotland) Regulations 2023.
