Businesses ‘underwhelmed’ by Robison’s support – Daily Business

Finance Secretary Shona Robison left businesses feeling “underwhelmed” by a package of support for the hospitality, retail and leisure sectors.

Ms Robison extended the relief on business rates, but was criticised for not going far enough and leaving many businesses concerned about their viability.

The budget statement included more funding for the NHS, colleges and skills training and will see the thresholds for the “basic” (20%) and intermediate (21%) rates of income tax increase by 7.4% to £16,537 and £29,526 respectively.

Ms Robison said: “By raising the Basic and Intermediate rate thresholds by substantially more than inflation, this Budget once again provides tax support for low and middle-income earners.”

It also means 55% of people on lower incomes will pay less tax than they would if they were earning the same wages in other parts of the UK, she said.

However, the higher tax rate (42%) will continue to start at £43,663 and the advanced and top rates will remain unchanged.

On business rates, Ms Robison is providing relief worth £184 million over the next three years. There will be 15% relief in 2026-27, worth £138m over three years for retail, hospitality and leisure premises.

The small business bonus scheme, which removes rates from 100,000 small business, will be continued for a further three years.

She says this means over 96% of retail, hospitality and leisure businesses “will pay zero or reduced rates.”

The package was received with disappointment by business which had warned of the impact of not delivering a more substantial level of support.

Marc Crothall, chief executive of the Scottish Tourism Alliance, said: “While the Scottish Government has responded with a package of modest short-term mitigation, the underlying issues within the system remain unresolved.

“The introduction of transitional relief, reductions to the basic and intermediate rates, and the modest 15% of non-domestic rates relief for retail, hospitality and leisure businesses will provide temporary breathing space for some, but not nearly enough to prevent potential closures and job losses.

“These measures do not respond to the scale of the challenge facing tourism and hospitality businesses across Scotland. Relief is capped, time-limited, and does not address the volatility created by revaluation or the cumulative burden of rising costs, leaving many businesses still on the precipice of commercial viability.”

Leon Thompson, executive director of UKHospitality Scotland, said: “Today’s Budget has not sufficiently addressed the challenges that hospitality businesses in Scotland face, and the majority will still be paying higher business rates bills in April.

“While the reduction in the poundage is positive, it does not offset significant increases in business revaluations and the loss of 40% relief.”

Susan Love of ACCA, commented: “We welcome measures to address business concerns about rises in non-domestic rates and the college funding crisis. But, overall, businesses may feel a little underwhelmed by today’s announcements.  

“While the Scottish Government stayed true to its commitment to avoid further increases in Income Tax and no new tax bands for the remainder of the Parliament, we’re disappointed in the continued fiscal drag, with the thresholds for the upper three bands remaining frozen for another year, drawing yet more taxpayers into these bands. 

“With further announcements on changes to council tax, and a new air departure tax, our tax landscape remains overly-complex.” 

David Lonsdale, director of the Scottish Retail Consortium, said: “Scottish Ministers seem to have their heart in the right place by providing a limited business rate discount for retail and hospitality businesses; but we fear they have significantly stumbled on the detail. 

“Whilst there appear to be no new significant burdens on retailers, we believe there was scope to do much more at a time when retail sales and footfall are in the doldrums.

“Regrettably the Budget falls short of the industry and government’s shared ambition of making Scotland the best place in the UK to grow a retail business.”

The budget statement included the introduction of two new council tax bands by 2028 for the most expensive properties in Scotland. Higher rates will be paid on properties worth over £1m based on an up-to-date valuation. She said this will bring greater fairness and increased revenue to councils.

The government will provide funding to deliver, by August 2027, a breakfast club for every Scottish primary and special school pupil.

In another measure targeted at the wealthy, the finance secretary announced plans for a departure tax for private jets.

“I say to those who choose to travel by private jet; In Scotland you will pay, and you will pay a fair share for that privilege” she said, adding that the air departure tax will be introduced in 2027,” she said.

On college funding she announced a 10% increase, delivering £70m extra this year.

There is no change to land and buildings transaction tax. The government is committed to completing the dualling of the A9 by 2035.

Tory finance spokesman Craig Hoy dismissed what he described as a “pre-election budget as predictable as it is cynical.”

He added: “It does nothing for those in the middle of the tax band. It prioritises welfare over work.”

Scottish Labour’s finance spokesman Michael Marra says the budget does not deliver “real change”.

He said it is “more of the same” adding: “The positive measures in this budget see the SNP desperately trying to fix a few of their own mistakes.”

Liberal Democrat economy and finance spokesperson Jamie Greene said: “In the coming months, I want the Scottish Government to work with me to explore how further, targeted financial support can give more Scottish businesses the proper relief that they desperately need.”

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