Hospitality leaders call on finance secretary to cut business rates

More than 400 leaders in the hospitality sector are calling on the Scottish Government to cut business rates in the upcoming Scottish budget.

The finance secretary was told in a letter from the Scottish Hospitality Group (SHG) that the industry is being unfairly punished by the tax system.

The letter, signed by 444 businesses and individuals, urges Shona Robison to reduce the business rates poundage to 35p for all licensed hospitality premises without a cap.

Signatories to the letter include BrewDog, Culloden House, Blue Lagoon and the McGinty Group.

It calls on the Scottish Government to fulfill its commitment to find a more “equitable” long-term replacement for the current non-domestic rates system before revaluations in 2026.

The SHG said the current, non-domestic rates system “unfairly penalises” the hospitality sector, which pays business rates based on turnover while other sectors, such as retail, pay business rates based on their square footage.

They pointed to a poll earlier this year by Survation, which found that 60% of people in Scotland backed reforming the existing non-domestic rates system.

Ms Robison was urged to offer more support to the hospitality sector, which the SHG says is still reeling from Covid while battling high energy prices.

Stephen Montgomery, director of the SHG, said: “Restaurants, hotels, and pubs are the lifeblood of our communities, but the current business rates system unfairly penalises Scotland’s hospitality sector and is not fit for purpose.

“That is why we need to see the Scottish Government deliver urgent rates relief in the budget on December 4 by reducing the poundage to 35p without a cap.

“As our open letter shows, such a change is overwhelmingly backed by the hospitality sector and has the support of some of Scotland’s largest employers, as well as the wider Scottish public.

“By backing the hospitality sector in the coming budget, the Scottish Government can help the industry to deliver more jobs and investment, turbo-charging economic growth and further supporting Scotland’s communities and high streets.”

The letter follows similar calls from Scottish Labour leader Anas Sarwar, who urged Scottish ministers to follow the UK Government and extend rates relief to businesses north of the border.

Chancellor Rachel Reeves extended the 40% rates relief for retail, hospitality and leisure firms in last month’s Budget.

Mr Sarwar urged the Scottish Government to follow suit and extend the tax break north of the border.

The Fraser of Allander Institute has estimated it would cost £220m to replicate this policy in Scotland.

The Scottish Government has been approached for comment.