Scottish Government business relief ‘sticking plaster on broken leg’

Scottish Government business rate reliefs are a “sticking plaster on a broken leg”, the head of the Association of Scotland’s Self-Caterers has said.

The Local Government, Housing and Planning Committee met to consider the Non-Domestic Rates (Miscellaneous Amendment) (Scotland) Regulations 2026 and take evidence from various business industry members.

New domestic rates for businesses were announced in the Scottish Budget in January and are set to take effect in April.

Some non-domestic rates measures for 2025 to 2026 include maintaining a 100% relief, capped at £110,000 per business, for hospitality properties, including grassroots music venues with a capacity of 1,500, on islands and specified remote areas.

They also include providing a 40% relief, capped at £110,000 per business, for hospitality premises with rateable values up to and including £51,000, including grassroots music venues with a capacity of 1,500.

Speaking at the Holyrood Committee on Tuesday Fiona Campbell, chief executive of the Association of Scotland’s Self-Caterers, said while the reliefs are welcome, they are “a sticking plaster”.

She said: “I think that the important and critical point here is that the reliefs are very welcome.

“However, the reliefs are a sticking plaster when actually the leg is broken. So we need to go back and look at the methodology.”

Due to concerns raised by by the licensed hospitality sector about the current valuation method, the Scottish Government committed to an independent review of the valuation methodology applied to the licensed hospitality sector for the purposes of non-domestic rates.

The review is chaired by BJ Gill KC and the report will release its findings by the end of 2026.

Ms Campbell told the committee she believes the methodology is currently “broken”.

She continued: “Whilst I appreciate that the assessors are independent, the Scottish Government does have jurisdiction over the methodology, and I think that’s where we would like the Scottish Government to step in and actually commit to a review, as per the Gill review.

“And it’s critical that the Scottish Government and the assessors and any independent KC that comes in to review anything works with industry to find a way forward. Because right now, the methodology is broken.

“Reliefs are wonderful, but they are under admission that the system is broken. We do not want to rely on reliefs, there shouldn’t be reliefs. If a system is proportionate and sensible, there wouldn’t be any reliefs, because it would just work. I think this is a bigger, more systemic problem that needs to be addressed, and we’re really, really keen to do that with the next Scottish Parliament.”

Also giving evidence to the committee, Minister for Public Finance Ivan McKee responded that there would always be people “who think they should be paying less”.

He said: “If you look at this in terms of the context over the last few cycles, at the moment we are in a position where the total rates bill levied on businesses is 6% less in real terms than it was pre covid, despite having more businesses eligible for for for rates.

“So that shows that far from the tax being ramped up, it’s actually taken a lower toll on businesses across the piece.

“Of course, businesses always do not want to pay rates. So we’ll always have these conversations, no matter what the system, no matter what the extent of the relief is in place is. I think the government has been very clear to listen to what businesses have to say and to come forward with relief proposals and reductions where that makes sense.

“Indeed, the total amount of relief for next year is £830 million, so it’s not an insignificant amount of money we’re putting into the system.

“And as I say whatever way you work through this, if you’re going to have a rate system that levies property based challenges to business or public services, then you’re always going to have people who think they should be paying less, of course you are as you are with any tax system.”

The issue is to be reviewed by the next Scottish Parliament.