Pubs and restaurants given 40% business rates relief in Scottish Budget

ScotGov has listened to the country’s hospitality sector – and matched the 40% business rates relief for pubs and restaurants announced in the recent UK Government budget.

In the statement to Holyrood this afternoon, the Cabinet Secretary for Finance & Local Government Shona Robison announced Non-Domestic Rates support of 40% for hospitality businesses in the Basic Rate Poundage, and the continuation of both 100% relief for Islands and the Small Business Bonus Scheme.

Scottish Beer & Pub Association 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.”

McClarkin noted that Scotland’s pubs had been hit with a ‘perfect storm’ of increasing costs and headwinds such as a growing regulatory burden and inflationary pressures, combining 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.”

Setting out the Budget to the Scottish Parliament, Robison said the ‘government had listened’ and would act on the priorities of people, businesses and organisations across the country.

“We will offer a 40% relief in 2025-26 to properties in the hospitality sector (including grassroots music venues with a capacity of up to 1500) which are liable for the Basic Property Rate (those with a rateable value up to and including £51,000), capped at £110,000 per business.

“Recognising the specific challenges faced by the hospitality sector in island communities, we will also continue to offer 100% relief in 2025-26 for hospitality premises (including grassroots music venues with a capacity of up to 1500) located on islands as defined by the Islands (Scotland) Act 2018, and in three prescribed remote areas (Cape Wrath, Knoydart and Scoraig), capped at £110,000 per business,” she explained.

“Taken together, we estimate these hospitality reliefs could benefit up to 13,000 properties. We also remain committed to working with the hospitality and other sectors, in the New Deal for Business Non-Domestic Rates sub-group, on the long-term issues that they have raised.”

English hospitality venues had been benefitting from 75% business rates relief until the new Labour Government’s first Budget, which reduced that relief to 40%.