Hospitality firms ‘unfairly penalised’ by rates system – Daily Business

A trade group has highlighted how the current business rates valuation system disproportionately penalises licensed hospitality.

The Scottish Hospitality Group (SHG) has pointed to one Scottish high street where firms of solicitors, accountants, travel agents and funeral directors are protected by the Small Business Bonus Scheme.

The only businesses that do not meet the £12,000 are licensed hospitality sectors, forcing them, to pay higher rates.

“That is not fairness; it is a structural imbalance, leaving licensed premises picking up the bill for
all local services, said Stephen Montgomery, director of the SHG.

He said this is being replicated across towns and villages nationwide, with hospitality out of reach of reliefs because of how hospitality is assessed.

The group has warned that Scotland’s latest non-domestic rates revaluation, due for implementation in April 2026 is totally disconnected from the trading reality and looks set to put licensed hospitality businesses at serious risk of closure.

In the high street assessed in the research, an accountant with a current rateable value (RV) of £2,750 will see it rise to £3,100 and will qualify for the Small Business Bonus Scheme as will a solicitor which will see its RV rise from £5,000 to £5,800.

However, a pubic house on the same street will see its rates rise from £24,000 to £53,000.

“Licensed hospitality feels like a convenient revenue source rather than a partner in
local economies,” said Mr Montgomery.

“The Scottish Hospitality Group is urging the Scottish Government to use the
Scottish Budget to deliver urgent action, including meaningful rates relief targeted for
licensed hospitality.

“We support a commitment to affordability and ability to pay as core principles of the
non-domestic rates system.

“This Budget is a real test. If the Scottish Government are serious about protecting jobs, town centres and economic resilience, non-domestic rates reform for licensed hospitality must move from rhetoric to reality.”