IF First Minister Humza Yousaf had been hoping that last week’s Autumn Statement would ease any of the pressure his administration is under in the build-up to the Scottish Budget, he was likely to have been disappointed.
Chancellor of the Exchequer Jeremy Hunt was certainly not met with unconditional praise from the business community when he unveiled measures that he hopes will get the UK’s spluttering economy firing again. But he did win plaudits for extending the current relief package on business rates for firms in the hospitality, retail and leisure sectors in England and Wales for another year.
The support measure grants 75% relief from rates, up to a maximum of £110,000 for business, and has been well received by firms south of the Border as they have faced a cost of doing business crisis for much of the last two years. It will be in place for the course of the 2024/ 2025 financial year.
Firms in Scotland, of course, have been faced with the same challenges, so it was absolutely no surprise to hear, in the immediate aftermath of the Autumn Statement, an amplification of calls for the Scottish Government to emulate the commitment made by Mr Hunt.
READ MORE: Glasgow pubs: What difference will an extra hour make?
The Scottish Licensed Trade Association has been busy gathering signatures to a petition asking whether people agree that “Scottish hospitality should have parity with England on rates relief”, while Stephen Montgomery of the Scottish Hospitality Group took to the social media platform X to make its call for relief and urge consumers to contact their local MSP. He made an impassioned plea for support for an industry he says is vital for jobs, suppliers, and local communities.
And it is not just the hospitality industry that has been making its feelings clear about business rates in Scotland. The Scottish Retail Consortium (SRC) yesterday urged ministers to “blunt” any increase in the business rate in December’s Budget. The SRC was earlier this month one of 35 industry bodies which wrote to ministers warning that the business rate or poundage – a figure multiplied by a property's rateable value to calculate business rates bills – was already at an “onerous 24-year high and a fifth higher than at the start of the previous decade”.
Adding its voice to the mix yesterday was the Federation of Small Businesses in Scotland. In its submission to Finance Secretary Shona Robison prior to her Budget statement on December 19, it makes the case for targeted reliefs to be reintroduced for small firms in the retail, leisure, and hospitality sectors. It also warned against any further “surprise” changes to or erosion of the small business bonus scheme, which the FSB said is regarded as a “lifeline” by its members.
In the current financial year, firms are eligible for relief through the scheme if all of the following are true: the combined rateable value of all of their business premises is £35,000 or less; the rateable values of individual premises are £20,000 or less; and the property is actively occupied.
At last year’s Scottish Budget, ministers maintained the basic poundage at 49.8p and introduced transitional relief to help firms adjust to increases in business rates which followed the draft revaluation of non-domestic properties last November.
READ MORE: Profits fall at Nairn's Oatcakes as Ukraine war hikes costs
It kept the small business bonus in place, though the threshold for 100% relief was reduced to properties with a rateable value of £12,000, after previously having been set at £15,000. Those with properties valued from £12,001 to £15,000 have relief tapered from 100% to 25%, while relief is tapered from 25% to 0% for those with valuations ranging from £15,001 to £20,000.
Andrew McRae, Scotland policy chair at the FSB, said yesterday: “Last week, the Chancellor used his Autumn Statement to extend targeted rates reliefs for those in retail, leisure, and hospitality in England for another year.
“We of course have a different system north of the Border, but the particular mix of challenges these sectors face – from their exposure to energy costs, food price inflation, staffing availability, faltering consumer confidence and more – still apply. Given that no such targeted reliefs have been available in Scotland since last July [2022], there’s now a strong case for their reintroduction.
“We also need to protect the small business bonus scheme, which has been a lifeline for so many small firms. Last year’s Budget saw the surprise move to raise the qualifying thresholds, bringing some small businesses into paying rates for the first time.
“The effects of these changes will continue to ripple through the economy as the transitional relief tapers off over the next two years, so this is not the time to make any further amends.”
As Mr McRae acknowledged, business rates are devolved and calculated differently in Scotland. And while the focus of business lobbying efforts has to a large extent been on calls for the Scottish Government to emulate the 75% relief provided down south, ministers here have been stoutly defending the amount of support already on offer.
In the Scottish Budget documents for 2023/24 published last December, the Scottish Government said the small business bonus scheme would remain “the most generous in the UK” and that it would deliver a manifesto commitment that 100,000 properties would be removed from having to pay business rates altogether.
READ MORE: Farage lives it up in jungle as bank chief licks wounds
However, no matter the generosity of the current arrangements, the Scottish Government now finds itself holding back a growing tide of business opinion that is demanding change and, in particular, for the 75% relief from business rates on offer to retail, leisure, and hospitality in England and Wales to be provided in Scotland.
Should Scottish ministers decline to follow suit, it would be hard to not view that decision as an own goal, at least in the eyes of the business community, even if they judge it best to carry on with the current approach.
It would also be a significant blow to Mr Yousaf’s very public commitment to improving the Scottish Government’s relationship with business which had become strained during the leadership of his predecessor in Bute House, Nicola Sturgeon.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel