Forbes extends business rates holiday by three months

kate forbes

Non-domestic rates relief for hospitality and leisure businesses that was due to end on 31 March will be extended by at least another three months to June 30. Scottish Finance Secretary Kate Forbes revealed yesterday in the draft Scottish Budget to the Scottish Parliament, adding that it could be extended further if the UK government makes a similar move in its budget in March.

She also reduced the poundage rate of non-domestic rates to 49p, which she said would save firms more than £120m and also said that payment of February business grants at Level 4, would be paid to hospitality businesses in whatever level a business is in.

However, hospitality and tourism chiefs say she has not gone far enough.

Scottish Tourism Alliance CEO Marc Crothall thinks the rates holiday extension is merely a ‘short-term’ fix. He said, ” This won’t go far enough in terms of supporting tourism businesses to a point of reopening and financial viability, therefore, it is crucial that additional funding comes from the Treasury to support a further extension.

“The STA has been instrumental in campaigning for an extension and a lower poundage rate and we are pleased that our asks have been recognised, with Ms Forbes announcing the lowering of the poundage rate to 49p.”

The Scottish Hospitality Group also welcomed the news of a three-month rates relief extension and a reduction in the poundage to 49p although it warned the financial aid for the hospitality industry doesn’t go far enough to support or meet increasing property and staff costs.

Stephen Montgomery, spokesperson for SHG, said, “It is welcome that the Scottish Government has recognised the enormity of the challenges facing our national hospitality in its budget statement.  However, what matters is how businesses across the industry can actually survive.

“Over the past six months, the Scottish Government has regularly over-promised and under-delivered for our sector. Thousands of hospitality businesses and employees across Scotland cannot
afford for them to do so again.”

However, SHG says more immediate financial help is still needed, that the UK government must extend and improve furlough, as this has a massive financial burden on business owners with NI contributions, and that the Scottish Government must support the hospitality industry if – as Kate Forbes predicts – the economy is to return to growth across 2021 and 2022.

Emma McClarkin,  CEO of the Scottish Beer & Pub Association and the British Beer & Pub Association,  commented, “This is a strong budget by the Finance Secretary and certainly will help support Scotland’s pubs and brewers through these unprecedented times. The business rates support in the form of a three-month cancellation will provide a degree of certainty for our members and help many businesses whilst the pandemic is still ongoing. 

  “In order to ensure a strong and recovery this needs to be further extended to the full year and it’s welcome that the Finance Secretary made clear that further support will be available dependent on the Chancellors budget in March. Now, the industry has its eyes on ensuring the support for the sector is replicated and boosted by the UK Government. 

 “We, therefore, urge the Chancellor, Rishi Sunak, to extend the Business Rates holiday for pubs and brewers across the rest of the UK. Businesses across the country are facing a cliff edge when the rates holiday ends in March. They need reassurance now, in this third lockdown, that the Government still has their back and is invested in them – as the Scottish Government has done. “

She also called on UK Chancellor Rishi Sunak to extend the furlough scheme beyond the end of April.

UKHospitality Scotland Executive Director Willie Macleod said, “The extension of the rates relief will give operators some stability but it is vital that the relief is extended for the entire 2021/22 financial year. Funding must be delivered to the devolved administrations to allow this to happen as the Finance Secretary indicated.

“The payment of grants for temporary closure and restrictions in February, regardless of changes in the level of restriction, is a pragmatic step and will bring much-needed support. Doubling the Rural Tourism Infrastructure Fund will also provide a degree of breathing-room at what is still a very difficult time for hospitality.

“The steps outlined in the Scottish Budget give a platform upon which to build. The Chancellor now needs to recognise that ongoing support is still needed; both for the extension of the Strategic Framework Business Fund and to enable businesses to survive the crisis before trading their way back to growth. Extending the VAT cut for another year is a must.”

Meanwhile, The Scottish Hospitality Group has also finalised its manifesto for how the government and industry can work together and will share with existing politicians and election candidates shortly.

Key demands in the manifesto include waiving business rates until at least March 2022, supporting a permanent reduction in the VAT rate to 5% on food services and accommodation and introducing specific grant schemes to help the hardest-hit sectors especially drink-led venues, nightclubs, and wedding venues.

Stephen Montgomery added: “It’s crucially important that the Scottish Government continues its dialogue with industry to ensure Scottish hospitality businesses are adequately supported throughout this pandemic and are in a strong position to support the country’s economic recovery. Our manifesto is the first step in setting out what the sector needs from the government and we hope that the Cabinet Secretary for Finance and the First Minister will listen closely to our proposals.”