Scottish groups demand urgent rates relief for hospitality
Two Scottish licensed trade bodies are urging the government to address the “unfair rates burden” on the sector, ahead of the 2026-27 Budget announcement next week.
The Scottish Budget 2026-27 will be announced on 13 January 2026, later than usual due to the UK Budget.
Trade groups the Scottish Beer and Pub Association (SBPA) and the Scottish Licensed Trade Association (SLTA) have submitted their joint draft Budget submission 2026-27 to the Scottish government, highlighting several ways it can support the sector.
Their key ask is to maintain the current 40% rates relief for licensed hospitality businesses and remove the £51,000 (US$68,855) rateable value cap.
The trade bodies emphasise that the Scottish pub, bar and brewing sector supports around 65,000 jobs, pays £1.2 billion (US$1.6bn) in wages, and contributes £2.3bn (US$3.1bn) in gross value added (GVA) to the economy.
“This powerful level of economic activity translates to a GVA multiplier of 2.0,” the SBPA and SLTA said in a joint statement. “Put simply, for every £1 of direct GVA in the sector, an additional £1 is created elsewhere in the economy. The strength of this multiplier demonstrates the benefits of the beer, pub and bar sector to the Scottish and regional economies.”
The trade groups highlighted the importance of the industry in providing “welcoming spaces that tackle loneliness and social isolation”, as well as their role in strengthening Scotland’s tourism sector.
However, the trade bodies warn that many businesses are facing increased prices. “Since 2019, we have seen an 86% increase in utility costs and a 58% increase in wages and salaries,” they said. “This has resulted in a 54% decrease in net income.”
The SBPA and SLTA believe that the current rates system, which considers rateable value based on turnover, is “not fit for purpose”.
“We support the current review into the NDR (non-domestic rates) methodology for licensed hospitality venues,” they noted. “Since 2019, turnover has increased by 37%, increasing rateable values which do not reflect the full economic picture. This is evident by examples of draft valuations for some licensed venues increasing the amount payable by over 300%.
“It is critical that while the review is ongoing – with expected changes to be made in time for the 2029 revaluation – that sector-specific relief is continued.”
The current £51,000 cap should also be removed, the trade groups urged. This is estimated to cost the Scottish government an additional £59 million (US$79.6m), according to their analysis of the ratings database.
In addition, the trade bodies are calling for the provision of 100% transitional relief for the licensed hospitality sector to protect against increases in the revaluation, and a £10m (US$13.5m) green fund for hospitality and breweries to help them decarbonise.
They are also asking for continued funding for the Best Bar None Scotland scheme, and the protection of VisitScotland’s budget to support tourist activity.
The trade associations stated: “If delivered, this support would provide immediate financial relief to over 4,000 licensed hospitality businesses, safeguarding thousands of jobs and preventing further closures. It would provide stability for investment into the sector, protect our tourism offer, and ensure pubs and bars remain a cornerstone of the visitor experience and local economies.”
The SBPA and SLTA believe this dedicated support will also protect social spaces and “boost economic growth”.
They called for “urgent action”, adding: “Failure to act risks accelerating closures, job losses, and undermining Scotland’s cultural and tourism assets.”
‘Ridiculous taxation increase’
Similar concerns have been raised by the Scottish Hospitality Group (SHG), which has warned that the 2026 non-domestic rates revaluation could push many licensed hospitality businesses to the brink.
The SHG noted sharp increases in rateable values are being proposed despite what it described as a fragile recovery for the sector, with the underlying methodology not due to be independently reviewed until later in 2026.
Stephen Montgomery, director of SHG, said some licensed venues are facing increases of more than 550%, describing the revaluation as “a ridiculous taxation increase on theoretical valuations that bear no relation to actual profits, or indeed the ability to pay”.
He added that for many operators, “the figures simply do not stack up, and the new bills would be the final nail in the coffin”.
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