Pubs and hotels in survival fight as rates rocket – Daily Business

Pubs and hotels in Scotland face a fight for survival as new analysis reveals the “staggering” increases in business rates being imposed from April.

A combination of revaluation, the ending of the 40% relief and a shortfall in support from the Scottish Government will see the average pub hit by a 77% rise in business rates in the next financial year, rising to 86% in 2028/29. It amounts to an additional £36,523 over three years.

Hotels will see their rates rise by 21% this increasing by 21% from April and by 27% in year three, an average increase of £68,007.

Leon Thompson, Executive Director of UKHospitality Scotland, said: “These are staggering increases and demonstrate the significant cost challenge facing Scottish hospitality businesses.

“This comes on top of increased costs of employment, energy, food and drink, and will be simply unsustainable for hospitality businesses to handle.

“These are not sums that can just be plucked out of thin air. The Scottish Government can’t expect the local pub to discover an extra £11,000 in the next two months to pay these significant increases.

“We have already seen cancelled investment, job losses and business closures across Scotland, and the scale of these rates bills make it even more likely that this will get worse.”

The Chancellor Rachel Reeves last week said she would be announcing further relief for pubs in England, and the Scottish Finance Secretary Shona Robison has indicated that she will respond once she knows what additional funding may be provided for Scotland.

Mr Thompson said: “The Scottish Government has already committed to passing on any additional funding it receives from the UK Government, but I urge it to go further and work with us to provide further support to avert these significant increases.”

Ms Reeves’ failure to expand the expected package to the wider hospitality and small business community prompted an angry backlash and demands for a rethink to avoid further closures and job losses.

There are calls for a reform of the entire business rates system which has been promised by Scottish Labour leader Anas Sarwar.