Hotels, pubs and restaurants across Scotland face a combined business rates hike of £69 million from 2026, following a 23% average increase in rateable values across the hospitality sector.
The figures come from a new analysis by UKHospitality Scotland of the Scottish Assessors Association’s draft valuation roll. The organisation has called on the Scottish Government to halt the revaluation process and work with the sector on a more sustainable solution, warning that the proposed increases could put hundreds of businesses at risk.
Leon Thompson, Executive Director of UKHospitality Scotland, said, “Hospitality businesses across Scotland continue to be punished by the broken business rates system.
“This 23% average increase to rateable values will push up hospitality’s business rates bill by as much as £69 million. That’s simply not sustainable.
“There are businesses that have received their draft valuations and are seeing increases of 160% and higher. They’re working out what this will mean for their bills and are coming to the clear realisation that the scale of increases will be unaffordable.
“Without action, we will only see business closures accelerate, more jobs lost and Scottish communities continue to see the loss of much-loved local venues.
“I urge [the Scottish Government] to pause the revaluation process and work with UKHospitality Scotland on an alternative solution, which spares our sector being hit by eye-watering increases to rates bills”
Under current arrangements, Scottish hospitality properties with a rateable value under £51,000 benefit from 40% relief. UKHospitality warns that removing this relief, alongside the new higher valuations, would be a double blow for small operators.
Examples from UKHospitality members include:
- A rural pub with a draft rateable value of £24,700—up 160% from £9,474—losing access to the Small Business Bonus Scheme and already forced to lay off staff.
- A West of Scotland hotel facing a 40% increase in valuation, on top of a similar increase last year, pushing it into a higher property rate.
- A city centre restaurant in Edinburgh that received a 54% increase in valuation and subsequently closed its doors.
The group is also calling for a permanently reduced business rates poundage for hospitality and leisure, set at 30p in the pound, to reflect structural shifts in the economy and the growth of online retail.
The Scottish Hospitality Group has echoed the call for intervention, warning that the current proposals amount to a “tax on entrepreneurship”.
“These revaluations are not just unfair; they are economically reckless,” said Stephen Montgomery, Director of the Scottish Hospitality Group. “You cannot claim to support town centres and local jobs while loading unsustainable fixed costs onto the very businesses that keep our high streets alive.
“A bar or restaurant cannot just ‘put 50p on a pint’ the way a supermarket can add 50p to a loaf of bread. The margins aren’t there, and the risks are far greater”.
The group has also backed the independent review into the valuation methodology for non-domestic rates, commissioned by the Scottish Government. Montgomery added, “We have set out clear, practical asks in our manifesto, but now we need Ministers to engage with us before the Budget, not after venues have already closed.”
According to SHG, examples published on the assessors’ own website show the scale of increases some operators are facing:
- Glasgow Bar: £56,000 → £380,000 (+578.6%)
- Barrhead Hotel: £83,000 → £268,000 (+222.9%)
- Edinburgh Bar: £13,894 → £52,300 (+276.4%)
- Ayrshire Hotel: £460,000 → £731,000 (+58.9%)
- Dumfries Hotel: £100,000 → £174,500 (+74.5%)
Industry leaders say that unless changes are made at the Scottish Budget in January, many hospitality businesses will be unable to absorb the costs and may be forced to close.