THE Scottish hospitality industry has urged First Minister Humza Yousaf to ensure business rates do not rise with inflation, as fears grow over a spiralling cost crisis which has contributed to two high-profile business failures in recent weeks.
Business rates are typically one of the highest overheads facing operators and trade body UKHospitality said it is keen to avoid heaping further pressure in stretched business owners.
In a statement issued ahead of Mr Yousaf announcing a new Programme for Government on Tuesday, the organisation has also called on the Scottish Government to move forward with recommendations from the New Deal for Business Group to review non-domestic rates.
READ MORE: Do shops and pubs deserve more support in Scotland?
The intervention from UKHospitality Scotland comes shortly after renowned Glasgow restaurant Brian Maule at Chardon d’Or and luxury hotel Mar Hall in Renfrewshire fell into administration amid an acute cash crisis in the industry.
The industry has long argued that it is unfair the Scottish Government has not offered the 75% relief from business rates that has been given to retail, hospitality, and leisure and retail firms south of the Border in the current financial year.
However, Scottish ministers have pointed out that its current support package means that around half of firms in the retail, hospitality, and leisure sectors in Scotland will not pay rates in the current year because of “the most generous small business relief in the UK”.
Leon Thompson, UKHospitality executive director, said: “After an extremely challenging year for Scottish hospitality with the chaos of the deposit return scheme and ever-worsening cost of doing business crisis, the First Minister has an invaluable opportunity to set out a positive vision for the sector.
“Essential to delivering for hospitality is action on business rates. The expected inflation-linked rates hike in April could deliver a multi-million-pound blow to businesses and a commitment from the First Minister that rates will not rise with inflation would give businesses the headroom they desperately need.
“With the vast majority of rates increasing last year and no offer of financial support, unlike in England and Wales, the business rates burden leaves many in a perilous situation and it needs to be addressed.
READ MORE: High-profile collapses spark fears of further failure
“Making such a commitment, alongside taking up recommendations to review non-domestic rates, would be a clear show of support to the sector.
“After years of wasted time and resource preparing for the deposit return scheme, the introduction of a tourist tax and new charges on single-use cups, the sector would be grateful for this year’s legislative agenda to simply not include plans that are harmful to hospitality.
“The First Minister spoke of a reset moment with businesses upon his appointment this year and, while there has been a shift, this can be cemented in his upcoming Programme for Government with clear action to address the enduring issue of business rates.”
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