Scots firms will be 'pushed to the brink' by impending business rates rise

The Scottish Chambers of Commerce (SCC) has said that companies across all sectors in the country are facing ”dramatic jumps” after business rates were revalued.

Business leaders have warned that a sharp rates increase due to effect in April will push Scots firms “dangerously close to the brink”.

The Scottish Chambers of Commerce (SCC) has said that companies across all sectors in the country are facing ”dramatic jumps” after business rates were revalued.

It said that some firms are facing a 300 per cent increase - which it has labelled “simply unaffordable”.

It comes as the UK Government will announce in the next few days how it will water down business rate rises for pubs. The Treasury is understood to be preparing a support package for the pub industry in England. It comes after pressure from landlords and industry groups - including more than 1,000 pubs banned Labour MPs.

Hospitality groups have urged the Scottish Government to bring in measures to help pubs north of the border. Their main call is to retain the 40 per cent business rates relief for the hospitality sector.

Dr Liz Cameron CBE, Director and Chief Executive of SCC, said: “In the current business environment sudden increases of this scale – in some cases approaching 300 per cent – are simply unaffordable. Many of our members are already struggling with tight margins, and dramatic jumps in rateable values will push otherwise viable businesses dangerously close to the brink.

“This isn’t sector-specific. It affects every business, in every sector, in every corner of Scotland. The message from our members is stark: there will be job losses if these increases go ahead unchecked.

“We are already seeing investment decisions delayed, cashflow squeezed and employers forced to reconsider their staffing levels. At a time when businesses need stability and support from government, this approach risks becoming a zero-sum exercise that damages confidence and stalls economic growth. Without urgent action in next week’s budget, viable businesses will close and jobs will be lost.”

One rural hospital hospitality firm in the Highlands said it was going to have to pay tens of thousands of pounds more: “Our rates were £6,000 in 2020, rising to between £8,500 and £11,000 after the 2023 revaluation removed our Small Business Bonus.

“Under the 2026 proposals, we are now facing a £30,000 bill – nearly three times our 2023 rates, without anything like the corresponding growth in turnover or profit. That kind of increase simply isn’t sustainable.”

A leisure activity provider in Edinburgh said it could have to lay off dozens of workers: “Our rates increased from an initial figure of £51,000 to £178,250 following a revaluation in July 2023 – a rise of 250 per cent.

“We pay £60,000 a year in rent, so this valuation is completely out of step with the rental market.

“The increase pushes this site into loss-making territory and raises serious questions about the long-term future of the venue and the 35 people employed there.”

A recreational facility in Falkirk said 50 jobs could be at risk as its rates are set to increase by more than £150,000: “Our rateable value has sat between £198,000 and £211,000 for many years. Under the draft 2026/27 figures, it is set to jump by 75 per cent to £350,000 – an increase of £150,000.

“While we are appealing the valuation, the process could take up to two years. In the meantime, the pressure on our cashflow puts 50 jobs at this site at real risk.”

Scottish Conservative shadow finance secretary Craig Hoy said: “SNP ministers need to wake up to the magnitude of the crisis facing Scottish businesses and ditch their devastating plans now.

“Rates rises on this scale are completely unaffordable and delusional.

“If they go ahead, it will be game over and thousands of Scottish jobs will be lost.

“The UK Labour government have announced another U-turn after being forced to recognise that the revaluation south of the border would destroy businesses.

“Shona Robison and John Swinney must do the same ahead of next week’s budget. For years, the SNP has clobbered Scottish businesses by failing to pass on the rates relief provided in England and these eye-watering rises would be the final nail in the coffin for many.

“The Scottish Conservatives also want to see full rates relief for commercial properties in the hospitality sector valued up to £100,000 and an extension of the Small Business Support Scheme in the budget.”

Scottish Lib Dem MSP Jamie Greene said: “The UK Government’s climbdown on rates should make the SNP urgently rethink their revaluation plans, which will hammer Scottish pubs and businesses.

“Businesses have been knocking on my door about the huge damage this hike could cause, with many looking down the barrel of closure.

“We have a responsibility to do everything we can to support small and medium sized businesses, which are the backbone of our economy.

“The Scottish Government must take their fingers out of their ears and put an immediate pause on the implementation of this revaluation to give businesses the breathing space they need.

“They must seriously look at calls from business to mitigate the damage any rate rises will do to our economy."

Leon Thompson, Executive Director of UKHospitality Scotland, said: "Scottish hospitality businesses are set for a £69 million increase to their business rates, if the Scottish Government choose not to act in its Budget next week.

"We have seen the uproar from the sector in England, where businesses are also seeing significant rates increases, and subsequent pressure on the UK Government to act.

"The Scottish Government can avoid this scenario by taking proactive action next week to extend the current 40% relief for hospitality businesses, and expand it so it is a universal relief for the entire sector."

Paul Togneri of the Scottish Beer & Pub Association said: "It is absolutely critical for pubs that the Scottish Government support the sector with rates relief in the budget next week.

“The ratings system for hospitality is broken and needs a complete overhaul - the Scottish Government do recognise this but with their review is not due to report until the end of 2026 and changes unlikely to happen until 2029 - action is needed to protect businesses and the thousands of jobs they provide until then.

"Support of a 40 per cent reduction last year was welcome but it needs to go much further this time. Scottish businesses also received no support in previous, while those in England got up 75% off.

“This has resulted in comparable pubs in Scotland paying significantly more over the last three years, putting them at a massive disadvantage.

“The Scottish Government have the opportunity to go some way in correcting that and show that they're on the side of the hospitality sector and our workers."