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Scottish business rates decision could ‘make or break’ hospitality sector

Stephen Leckie, chief executive of Crieff Hydro. Image: DC Thomson.
Stephen Leckie, chief executive of Crieff Hydro. Image: DC Thomson.

The owner of Crieff Hydro has urged the Scottish Government to act on business rates, saying it will “make or break” the hospitality sector.

Chancellor Rishi Sunak announced a 50% business rates discount for hospitality, retail and leisure businesses in his budget.

Business rates are a devolved issue and the Scottish Government is now under pressure to introduce a similar measure.

At present, the 100% rates relief in Scotland for retail, hospitality, leisure and aviation ends in April.

The Scottish Government has not disclosed its plans for rates after April.

Help needed for hospitality

Stephen Leckie, chief executive of Crieff Hydro, warned businesses could “close their doors” if help doesn’t continue.

He said: “It’s clearly very good business rates news for Northern Ireland, Wales and England.

“We don’t know the intentions of the Scottish Government.

“We are very grateful to Scottish finance secretary Kate Forbes for the low business rates until April.

Crieff Hydro writing competition
The owner of Crieff Hydro has backed the introduction of vaccine passports.

“What we are hoping she’ll match the 50% reduction, with a cap of £110,000 for business rates.

“This is a big thing. This could make the difference in making or breaking our industry in Scotland next year as we go into recovery.”

VAT concerns for hospitality firms

Mr Leckie, who is also chairman of the Scottish Tourism Alliance, was disappointed there was no mention of VAT in the budget.

It means hospitality’s current rate of 12.5% will return to 20% in April.

He said: “We are also pushing the UK Government to keep VAT down as that would help.

“If businesses in our sector can’t see a future they’ll just close the doors.”

Nicholas Russell, managing director of Balbirnie House Hotel in Markinch, said Holyrood should follow Westminster with 50% rates relief next year.

He said no mention of VAT was a “catastrophic error of judgement”

Nicholas Russell of Balbirnie House Hotel

He previously wrote to the Chancellor calling for hospitality’s rate to be set at 5%.

“There was no mention on VAT so it looks like the rate will revert to 20% in quarter two of next year,” he said.

“I would like it to be reduced and normalised at significantly less than 12.5%.

“If it’s to go to 20% the damaging implications are going to be profound across the span of UK hospitality.”

Dundee retailer’s business rates hopes

Under Sunak’s plans any eligible company can claim a discount on their bills of 50%, up to a maximum of £110,000.

The Chancellor said it is a business tax cut worth almost £1.7 billion.

Keith Ingram, owner of Assai Records, which has shops in Dundee and Edinburgh, said retailers needed help while footfall remained low.

He said the difference rates relief makes is “incredible”.

“We are in good locations but our footfall is down massively,” he said.

“Not having to worry about rates has been a blessing – it’s the equivalent of employing two part-time staff.

Keith Ingram, owner of Assai Records.

“I’m hoping the Scottish Government gives retailers more help with rates. especially as other cost rises are taking place – gas, paying staff properly.”

In her response to the budget, finance secretary Kate Forbes did not signal her intentions with business rates after April.

She said: “This year our retail, hospitality, leisure and aviation relief, at 100%, is more generous than the UK Government’s.”crieff