Vape shops lose rates relief in review of system – Daily Business

Vape shops are set to lose discounts from their business rates bills as part of a commitment to reform the system.

Deputy First Minister Jenny Gilruth announced the decision to parliament which was also told that an independent panel will examine the outcome of the latest revaluation following reports of inconsistencies. Some businesses have seen their valuations rise by significant amounts.

The panel will assess whether there are any anomalies that exist within the revaluation and report within three months of being appointed. The Tories accused the SNP of “dithering” and said businesses need action now.

Ms Gilruth said rate relief for vape shops will end from 1 April next year. They will join payday lending firms, car parks, betting shops and some short-term let properties which are already excluded from eligibility for non-domestic rates Small Business Bonus Scheme relief and Fresh Start relief.

She said: “The Scottish Government is absolutely determined to drive economic growth, and enable businesses to invest, grow, and create jobs. A key part of making that economic growth a reality will be getting the framework right on Non-Domestic Rates.

“Ministers have heard the concerns raised by businesses and trade bodies about apparent anomalies within the 2026 revaluation, and that is why we are taking urgent action.

“This includes taking action to ensure vape shops are contributing to the high street, recognising the growth of the sector in recent years and ensuring rates relief aligns with our public health commitments.

“We will also examine comprehensive improvements and reforms that can be made to the non-domestic rates system, seeking independent advice and working closely with business. This will ensure that the system works overall – and provides the clarity, the confidence, the incentive and the transparency businesses need.”

Guy Hinks, Scotland Chair of the Federation of Small Businesses, welcomed “the promise of quick action to address some of the deeply unfair and perplexing anomalies thrown up by the recent rates revaluation.

“Simplifying the opaque and overly complex assessors system which administers the rates regime reflects what we have been saying for many years.

“Uplifting its thresholds in line with the latest revaluation is now essential to ensure it continues to reach those firms it was designed to support. With more than twice as many Scottish small businesses expecting to shrink than grow in the coming year, decisive action to tackle increasing cost pressures is urgent.”

Entrepreneur Sir Tom Hunter, who held a meeting with First Minister John Swinney to call for changes to rates, said: “Non-Domestic Rates in Scotland have been a brake on economic growth at a time when we fundamentally need that growth.

“Businesses are investing, creating jobs and then being penalised with huge increases in their rates bills – why would you bother? By putting economic growth at the heart of Government policy, as demonstrated by the Deputy First Minister’s statement today, she has moved to remove the NDR brake on investment. 

“Hospitality and retail are often the gateway to work for young people – by releasing the brake of huge rates bills more jobs will be created and we will see more young people into work and less destined for the horror of being NEET (Not in Education, Employment or Training).

“I am encouraged by the speed the Government has moved on this – it’s step one but a good step so we can now move forward to get the economy accelerating and let all of Scotland flourish. Good luck.”

Craig Hoy, Scottish Conservative finance spokesman, was less impressed with the government’s announcement. He said: “Scottish businesses have had enough of the SNP’s dithering while they face crippling costs and some of the highest rates in the UK.

“The latest revaluation, which the Nationalists refused to pause in April despite desperate pleas from the sector, has hammered many businesses with rises of several hundred per cent.

“These increases are completely unsustainable, and bars and restaurants will go to the wall as a result of them.

“The government has offered nothing but endless reviews of the revaluation, assessors and reliefs when Scottish firms are crying out for decisive action now to reduce the intolerable burden they face and to restore confidence in the system.”