Call on next Scottish government to reform business rates, tackle red tape and help small firms win public contracts

Whoever forms the next Scottish government should give a “fresh focus” to supporting Scotland’s 350,000+ small businesses, the Federation of Small Businesses (FSB) has said.

In its manifesto ahead of the the 2026 Scottish Parliamentary elections, FSB Scotland warned the country’s small businesses generate £98 billion in annual turnover but continue to face rising costs and a growing tax and regulatory burden.

Among its demands are maintaining the “lifeline” small business bonus scheme (SBBS) for business rates.

Following the most recent non-domestic rates revaluation, some small businesses face increases in their rateable values of up to 400%. FSB Scotland warned that eligibility thresholds for the SBBS need to be “urgently revisited” or it will fail to protect the small businesses that need it.

FSB Scotland has also urged the next government to mandate proper business and regulatory impact assessments (BRIAs) for all new policies and regulations. The organisation’s research shows that 14% of small businesses spend more than a full working day each week on regulatory paperwork.

Other asks are procurement reforms to remove barriers to small firms bidding for a share of the more than £16 billion in public contracts awarded in Scotland each year, new employer incentives for apprenticeships and increased funding for Business Gateway support services.

Guy Hinks, chair of FSB Scotland, said:

“Small businesses are not asking for special treatment – they are asking for a system that recognises their collective scale and contribution, as well as the reality of trading on Scotland’s high streets. Business rates reform, for example, is now unavoidable if we want to protect jobs, town centres and local economies.

“Small businesses owners are the people who make Scotland work, creating local jobs and driving economic growth. Yet, such are the pressures on them, a third expect their business to shrink or close in the next 12 months. That is something that should worry us all.

“What we are calling for is a renewed focus on what these everyday businesses need to thrive – and for reforms to ensure they can continue to invest, employ and serve their communities.

”We are not talking about faceless company directors or absentee owners. Small business owners are among the hardest working people in the country. They are people we would all recognise – the mechanic who fixes your car, the childminder who looks after your children, the florist and shoe repairer on your local high street.”