Scottish shops and restaurants are calling for a business rates break as pressure grows on the Scottish Government to use next month’s Budget to cut the cost of trading.
Retail, hospitality and small business groups want ministers to improve rates relief after Chancellor John Healey announced additional support for businesses in England in last week’s UK Budget.
From April, the threshold for 100 per cent Small Business Rates Relief for qualifying retail, hospitality and leisure properties in England will rise from £12,000 to £18,000.
The UK Government says the move will take around 70,000 additional high street businesses out of business rates altogether.
Pubs, social clubs and most live music venues in England will also receive an additional 20 per cent reduction, taking their total relief to 35 per cent.
Business rates are devolved, meaning the measures do not automatically apply in Scotland.
Attention has now turned to the Scottish Budget on 3 December, with retailers and hospitality businesses calling for ministers to prevent a widening gap between Scotland and England.
Scottish Retail Consortium director David Lonsdale said medium and larger shops were particularly exposed.
He said: “We’ve long supported the Scottish Government’s existing business rates relief scheme for the very smallest shops.
“However, medium-sized and larger stores in Scotland pay a business rate above that in England, in some cases considerably above, and we need to see a level playing field restored.
“That’s why our priority is that the existing retail, hospitality and leisure sectors rates relief is extended to larger stores and frozen in the upcoming Scottish Budget, as a first step towards making the business rate for all sizes of stores at least as competitive as England’s.”
The Federation of Small Businesses Scotland has also called for ministers to restore the Small Business Bonus Scheme thresholds that applied before 2023.
Businesses occupying a single Scottish property with a rateable value of £12,000 or less can currently qualify for 100 per cent relief. Before changes introduced in 2023, the threshold was £15,000.
FSB Scotland chair Guy Hinks said: “Small businesses’ overheads have been soaring for years, with 83 per cent in Scotland noticing a hike in the last quarter alone. Nearly four in ten report these increases are in double digits.
“It’s therefore essential that this extra funding is used to cut the cost of doing business in Scotland. This puts all eyes on the Scottish Government Budget in December.
“That is an ideal opportunity to, for example, heed our calls to restore the Small Business Bonus Scheme qualifying thresholds to their pre-2023 levels, thereby protecting more of the firms the scheme was designed to support.”
Hospitality businesses are making a similar case.
UKHospitality Scotland said the rates measures announced for England strengthen the case for further help north of the border.
Executive director Leon Thompson said: “UKHospitality Scotland now urges the Scottish Government to go further, in its Budget on 3 December, and provide additional business rate support for hospitality here.
“Whilst it is immensely disappointing that the Chancellor chose not to reduce the rate of VAT for hospitality, this makes it even more vital for this business rates support to be passed to our businesses, and that existing support measures be extended to hospitality businesses with rateable values above £100,000.
“In doing so, business closures can be stemmed, and hospitality can play its full part in driving economic growth in every part of the country.”
The current Scottish system gives eligible retail, hospitality and leisure premises with a rateable value of up to £100,000 a 15 per cent discount.
Licensed hospitality premises and music venues within the qualifying bands receive additional support taking their rates relief to 40 per cent.
The Scottish Government says almost all – 96 per cent – of retail, hospitality and leisure properties can benefit from some form of rates relief.
Ministers have also pointed to a wider package of non-domestic rates support worth more than £870 million this year.
A Scottish Government spokesperson said: “The Scottish Government is providing a package of reliefs worth in excess of an estimated £870 million in 2026-27 and almost all – 96 per cent – of retail, hospitality and leisure businesses in Scotland can benefit from some form of rates relief.
“Decisions will be set in the Scottish Budget in the usual manner and the Deputy First Minister has already committed to a comprehensive review of non-domestic rates.”
Deputy First Minister Jenny Gilruth will set out the Scottish Government’s tax and spending plans on Thursday 3 December.