Scottish business rates relief for retail and hospitality is being reduced, as per the Scottish Budget, which was published yesterday (13 January). 

Dropping from 40% to 15% for the 2026-27 financial year, the decision has been met with criticism from the Scottish Licensed Trade Association (SLTA), which said the government needs to offer more support. 

“Commercial rates, particularly with the new rates revaluations for the next three years, is the hot issue for the licensed hospitality sector,” the SLTA began. 

“That is why the Scottish Licensed Trade Association and other key industry bodies urged the Scottish government to continue with the current 40% support package.” 

The SLTA further expressed disappointment at the continuation of the rateable value (RV) threshold, used to determine eligibility for certain business rates relief, which it said is harmful. 

“We sought removal of the £51,000 RV cap, which excluded over 2,500 businesses from receiving support,” the association stated. 

In positive news, it was announced that Scottish business rates are set to fall, with basic business rates changing from 49.8p in 2025-26 to 48.1p in 2026-27. Intermediate rates will change from 55.4p to 53.5p and higher rates will drop from 56.8p to 54.8p. 

However, for the SLTA, this change was not substantial enough, given the simultaneous reduction in relief. “This Budget has gone nowhere near far enough to meaningfully help the industry,” it said. 

Somewhat more positively, the Scottish Wholesale Association (SWA) welcomed the lowering of business rates. 

CEO Colin Smith said: “The Scottish Wholesale Association welcomes the steps taken in the Budget to support businesses, particularly the movement on business rates, which will help stabilise costs across parts of our supply chain.” 

At the same time, the SWA said that the Budget could have been more radical in its package of support to help to the food and drink industry. 

“This remains a cautious Budget,” said Smith, “and caution alone won’t address the pressures facing Scotland’s food and drink supply chain. When costs rise anywhere – from producers to hospitality and retail – wholesalers feel it first and hardest.”