By Scott Wright
THE Scottish Government has been urged to match the relief from business rates handed to the hospitality industry in England by Chancellor Rishi Sunak in his Autumn Budget when the current exemption in Scotland ends in April.
Sunak announced a 50 per cent business rates discount for the retail, hospitality and leisure sectors south of the Border from 2023 in a tax cut he declared would be worth £1.7 billion.
It was among several measures designed to support the hospitality sector in yesterday’s Budget, which included a duty cut on draught beer and cider sold in pubs from containers holding more than 40 litres. Sunak said it was the biggest cut in cider duty since 1923, and the largest reduction in beer duty for 50 years.
Scottish business groups have responded to the business rates changes by calling on ministers north of the Border to extend relief from the tax when the current exemption ends.
Hospitality, leisure, retail and aviation businesses in Scotland are currently exempt from paying business rates under measures introduced to support companies through the pandemic.
But the break is due to end in April, and hospitality chiefs fear it could “make the difference between survival and closure” for many businesses in Scotland if it is not extended.
Leon Thompson, executive director of UKHospitality for Scotland, said: “Today’s Budget statement from the Chancellor made clear the commitment to provide a 50% discount rate to businesses in the coming financial year.
“Hospitality businesses have benefited from two years of 100% relief on business rates from the Scottish Government, but face a cliff edge from April 1, 2022 if relief is not continued.
“Today the Chancellor has declared his support for business and the Scottish Government must at least match this if hospitality businesses across Scotland are not to face further financial difficulty and possible
closure.
“Our businesses are at the heart of communities. They remain in a fragile state and need a commitment from the Scottish Government that they can look forward to the same support as their counterparts in England.”
Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said: “In Scotland, there is a very welcome rates freeze until March 2022.
"However, the SLTA now calls on the Scottish Government to at least match, if not improve on, the Chancellor’s ‘aid package’ for our industry with the added proviso that this is directly focused on those most in need within the sector.
“Unlike the on-trade, supermarkets and other retailers selling alcohol benefited from remaining open throughout the pandemic while the hospitality sector bore the brunt of a range of restrictive measures curtailing their ability to trade – more so than any other business sector.”
The Scottish Retail Consortium said the Budget contained little to “reduce the actual cost of doing business here in Scotland”.
Director David Lonsdale noted that tax-free shopping has been brought to an end this year, and observed that increases in employers’ national insurance contributions and corporation tax are “in the pipeline”.
Mr Lonsdale said: “Hopefully, the Scottish Finance Secretary (Kate Forbes) can be more ambitious on business rates than Mr Sunak – who appears to have fumbled the chance to reduce the rates burden for all retailers in England – and act to blunt the full reinstatement of rates here in Scotland for retailers next spring. With retailers’ revenues continuing to fall short, a 100% reinstatement of business rates would be unsustainable for struggling shops.”
The rates discount was among a number of tweaks the Chancellor made to the rates system down south, which fell short of the comprehensive review business groups had been calling for. The changes include an incentive for businesses to invest in property improvements without facing extra business rates for 12 months.
In her response to the Budget, Ms Forbes said it was “interesting to see the UK Government belatedly adopting our ideas” on business rates.
She said: “We are already committed to three yearly revaluations from 2023 and were the first administration in the UK to introduce a relief for property improvements in our more generous Business Growth Accelerator relief, which also covers new builds.
“This year our retail, hospitality, leisure and aviation relief, at 100%, is more generous than the UK Government’s and we already have the most generous renewable energy relief package in the UK.”
Tracy Black, director of the Confederation of British Industry in Scotland, said Sunak had shown a “genuine willingness to listen to business that will help get firms innovating and help the country grow”. But she said it “leaves more to be done to deliver the high investment, high productivity economy the country needs.”
Ms Black added: “The Government’s commitment to innovation will be central to efforts to build and sustain the industries of the future. This will be essential to be globally competitive so the Government must stick to these targets in the coming years. With that in mind, alongside an uplift for the Scottish Budget overall, it was pleasing to see recognition for the green jobs that will be so important to Scotland’s future growth.”
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