Scottish ministers have been warned that a new package of business rates relief is merely a "sticking plaster", leaving firms facing "eye-watering" bills despite government intervention.
Budget Measures Fall Short for Struggling Sectors
Finance Secretary Shona Robison unveiled her draft Budget for 2026-27 on Tuesday 13 January 2026, outlining a series of measures aimed at softening the blow of a forthcoming rates revaluation. The plans include reducing basic, intermediate, and higher property rates and providing £184 million in transitional relief spread over three years.
Additional support was pledged for retail, hospitality, and leisure businesses, offering relief worth up to £110,000 per business annually. However, industry leaders have reacted with dismay, arguing the support fails to address the scale of the challenge.
Industry Backlash: 'A Drop in the Ocean'
Leon Thompson, executive director of UKHospitality Scotland, stated the Budget had "not sufficiently addressed the challenges" facing the sector. He warned that most businesses will still pay higher rates bills from April 2026.
"The package of reliefs put forward to help mitigate the impact of these increases is merely a sticking plaster to cap eye-watering bills," Thompson said. "The increases facing our local pubs, hotels, restaurants and cafes over the next three years are still staggering." He cautioned that without further action, job losses and closures would accelerate due to the sector's growing tax burden.
David Lonsdale, director of the Scottish Retail Consortium, expressed concern that the Scottish Government had "significantly stumbled on the detail". He highlighted that the relief appears to fall short of the permanent discount available to retailers in England, potentially making Scotland "materially less attractive as a location for investment".
Calls for Greater Ambition to Save Businesses
The criticism was echoed across the business community. Guy Hinks, chairman of the Federation of Small Businesses in Scotland, labelled the Budget a "missed opportunity", expressing disappointment that the government did not go further to protect small firms from damaging tax rises. He noted that while reducing the poundage rate helps, for businesses facing hikes of up to 400%, the measures are "effectively a drop in the ocean".
Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce (SCC), acknowledged the Budget offered a "glimmer of hope" but said firms needed more support to restore confidence. She raised a specific warning about "cliff-edge effects", where businesses could be pushed beyond eligibility thresholds for support due to rateable value increases, despite no improvement in their trading conditions.
"The Government must clearly state how it is planning to support the businesses who are at risk of falling through the cracks," Dr Cameron urged, following what the SCC had termed a "stark warning" to ministers that inaction risked pushing businesses to the brink.
