The Scottish Government set out its Budget on 4 December 2024 which will have implications for business rates from 1 April 2025. Our Head of Rating, Richard Foster, sets out the headlines below.
- The Basic Property Rate applied to Rateable Values up to and including £51,000 will remain frozen at 49.8p (now frozen since 1 April 2022), however;
- The Intermediate and Higher Property Rates will increase by inflation as follows:
- For Hospitality premises (including Music Venues with capacity up to 1,500) with a rateable value up to £51,000, a new 40% relief will be introduced for 2025-26, capped at £110,000 per business. Larger Hospitality premises will not be eligible and there will be no equivalent relief for Retail or Leisure premises.
- The 100% relief for Hospitality premises on the Islands and specified remote areas introduced from 1 April 2024 will continue in 2025-26, capped at £110,000 per business, and will also be available for music venues with a capacity up to 1,500 per business from 1 April 2025.
- All other existing reliefs, including the Small Business Bonus Scheme, will be maintained at current levels.
Richard Foster, FG Burnett’s Head of Rating, observes:
“If the government’s strategy for the economy is growth, then this budget will do little to achieve that aim. Instead, the Scottish Government continues to raise taxes for many rather than supporting growth to increase the tax base. Whilst the headline giveaways of freezing the Basic Property Rate and introducing a 40% relief for some hospitality businesses are welcome, it is a major blow to those businesses occupying larger premises in this sector. Not only will they not qualify for any relief, but they will in fact see their rates bills increase. Those in the retail and leisure sectors will feel particularly aggrieved given that these sectors are suffering from many of the same challenges as those in hospitality. All three sectors will also feel the brunt of the increase in National Insurance contributions following the Westminster budget. The decision not to provide relief for retail and leisure premises in Scotland will mean another year of higher taxes in those sectors in Scotland compared to their counterparts in England, which have benefited from relief since 1 April 2022. It seems inevitable that we will see many businesses choosing to divest away from Scotland”.
“Ratepayers should be aware that Retail, Hospitality and Leisure relief previously available from 1 April 2020 to 30 June 2022 to mitigate financial hardship during the COVID-19 pandemic will close for applications on 31 March 2025”.
“Our aim is to support clients to manage their business rates and reduce rates liability as far as possible. 2025 is set to be a busy year as we continue to work with clients to achieve that aim”.
