The Scottish Hospitality Group and the NTIA are calling for urgent action from the Scottish Government in today’s budget to support the industry with both calling for rates reductions.
SHG has demanded that the Scottish Government “do the right thing” and reduce the business rates poundage to 35p for all licensed hospitality premises without a cap.
The trade body, which represents hundreds of large and small hospitality businesses across Scotland, said such a change would help support the sector and boost economic growth. More than 400 business leaders recently signed SHG’s open letter backing the change.
SHG also wants the Scottish Government to work with them to reform the unfair non-domestic rates system ahead of revaluations in 2026. The current system taxes hospitality businesses based on their turnover, rather than square footage, as is the case with retail, and therefore unfairly penalises the sector.
Speaking ahead of the budget, Scottish Hospitality Group Director Stephen Montgomery 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 do the right thing and deliver urgent rates relief in the budget today by reducing the poundage to 35p without a cap, which will help all licensed hospitality.
“As our open letter signed by more than 400 business leaders showed, 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 licensed hospitality sector in the budget today, the Scottish Government can send a clear signal that it is listening; that it is committed to working with us in reforming the punitive and unfair non-domestic rates policy ahead of the 2026 revaluations, and by helping the industry to deliver more jobs and investment, turbo-charging economic growth and further supporting Scotland’s communities and high streets.”
The NTIA has also issued a stark warning saying that “Without urgent action in this week’s budget, many of our most cherished venues and cultural businesses could be lost forever.”
The industry body goes on to say, “The once-thriving night-time economy is now in danger of collapsing. Nightclubs, bars, music venues, and cultural spaces—essential to Scotland’s identity—are shutting down at an alarming rate. The combination of crippling operating costs, the highest tax policies of any UK Nation, and reduced consumer spending has created an unsustainable environment. Every week brings new closures, with cherished venues going dark and falling silent.
“Recent figures from the British Institute of Innkeeping (BII) reveal that 25% of venues are already operating at a loss, 80% are generating no profit at all, and for some rising costs from the latest UK budget will amount to a devastating 10%+ of turnover.”
It points out that, in England, “and in recognition both of the unsustainable increases in costs and the importance of the sector to employment and economic growth, businesses have been shielded by a 75% business rates discount. In Scotland, our SMEs have been denied equivalent support, leaving them exposed to mounting financial pressure. The result? A disproportionately higher rate of business failures and job losses north of the border as confirmed by recent figures from the SBPA demonstrating that sectoral failures in Scotland are running at a rate 100% higher than in England.”
The NTIA is calling on the Scottish Government to act decisively in the budget by implementing “a minimum of 40% business rates relief for 2024/25 mirroring the support provided in England. Scottish companies have missed out on the 75% relief which has proved vital to English businesses over the previous 3 years so are now in greater financial distress.
“An extension of the 100% Islands rates relief to 200 of Scotland’s most vulnerable cultural venues. These venues are not just businesses—they are the heart of our town and city centres, driving footfall, culture and community spirit. They were the worst affected by the pandemic, employ the largest numbers of staff, musicians and artists, and have the highest costs.”
It says that “this isn’t just about businesses—it’s about people’s lives and Scotland’s cultural identity. If support isn’t delivered now, the cost will be irreversible.”