A Scottish hospitality organisation has said the latest business rates revaluation is “totally disconnected from the trading reality” and will force pubs, bars and restaurants to shut down.
The Scottish Hospitality Group (SHG) said the revaluation, due for implementation in April 2026, “is based on an out-dated rates methodology” with some hospitality businesses facing increases as high as 550%.
SHG called on the Scottish government to use its Budget on 13 January to announce that the revaluation will not go ahead.
SHG director Stephen Montgomery said:
“The decisions taken at the Scottish Budget will determine the future of licensed hospitality.
“The business rates revaluation is a hammer blow with some licensed hospitality businesses facing brutal increases of over 550%. A ridiculous taxation increase on theoretical valuations that bear no relation to actual profits, or indeed the ability to pay. Even the first minister John Swinney MSP has expressed concern, but now is the Scottish Government’s opportunity to act.
“For many operators, the figures simply do not stack up, and the new bills would be the final nail in the coffin.”
The group pointed to a study of one high street which is home to solicitors, accountants, travel agents and funeral directors. The only firms above the small business bonus scheme threshold of £12,000, which means companies don’t pay business rates, are licensed hospitality operators, despite operating from comparable locations, and employing less people.
Montgomery added: “You cannot tax businesses into growth. By ignoring real life affordability there will be real life closures, job losses and empty high streets as result.
“The Scottish Hospitality Group is urging the Scottish government to use the Scottish Budget to deliver urgent action, including meaningful rates relief targeted for licensed hospitality.
“We support a commitment to affordability and ability to pay as core principles of the non-domestic rates system.
“This Budget is a real test. If the Scottish government are serious about protecting jobs, town centres and economic resilience, non-domestic rates reform for licensed hospitality must move from rhetoric to reality”.
“We are calling on the Scottish government to lead the way and deliver fairness for licensed hospitality. Our colleagues in England have suffered immensely from the UK Budget failing to deliver reliefs after their revaluation. Scotland can’t sleepwalk into the same economic carnage.”
In England, many hospitality businesses say they face big increases as a result of business rates reforms announced in the chancellor’s November Budget. Prime minister Keir Starmer this week admitted businesses will “struggle” and hinted that new support may be in introduced.