Almost a third (32%) of Scottish businesses want ministers to cut their rates bills, as more firms become concerned about survival amid rising cost pressures, according to a new survey.
The latest Understanding Business survey, carried out by strategic communications firm Charlotte Street Partners with researchers at the Diffley Partnership, found that almost seven out of 10 (69%) Scottish businesses surveyed said they have faced increasing costs, including hikes in business rates.
Impact on Prices and Growth
More than half (51%) of affected companies said they have increased their prices in response to rising business rates. Increases in rates have also resulted in over a quarter (27%) of firms delaying growth plans, while 22% of businesses have relied on savings or investment. Almost a fifth (18%) have created new charges, and 14% have resorted to cutting staff.
The survey of more than 500 businesses in Scotland also found that two-fifths were more concerned about survival than they were three months ago, with this now at the highest level since March 2024.
Taxation Concerns
Reducing business rates was the second most popular option for helping businesses, with 32% backing the move, the highest level since June 2024, while 40% want taxation overall to be cut. Malcolm Robertson, founding partner at Charlotte Street Partners, said the findings “should trouble any politician at Holyrood or Westminster who claims to support economic growth”.
He added: “The business rates regime is little more than a tax on employers of people, of those who work for them and on the things that might give us comfort in difficult times, like going to the pub or out for a meal or on holiday. It is also a tax that is not fit for purpose and endless reviews and tinkering around the edges will not get the economy moving. Business rates and UK-imposed taxes on employers must come down to give businesses the confidence they need to invest and create good, well-paid jobs.”
Government Response
Mr Robertson’s comments came after Deputy First Minister Jenny Gilruth announced the Scottish Government has commissioned an independent review into “anomalous” business rates hikes. Meanwhile, Scott Edgar, senior research manager at the Diffley Partnership, said the survey’s findings “point to a mixed picture for Scottish businesses”.
He said: “While many indicators remain relatively stable, more firms expect to raise prices in the months ahead, and concern about business survival has risen to its highest level in over two years. At the same time, confidence that governments are responding to business needs has fallen back. Although a clear majority still see Scotland as a good place to do business, that underlying optimism is starting to come under pressure from persistent cost challenges.”
A Scottish Government spokesperson said: “The Scottish Government has listened to the concerns of businesses, which is why Deputy First Minister Jenny Gilruth this week announced a comprehensive review of non-domestic rates. This will include setting up an independent panel to examine the outcome of the 2026 non-domestic property revaluation. The Scottish Government is determined to drive economic growth and enable businesses to invest, grow, and create jobs. A key part of making that economic growth a reality will be getting the framework right on non-domestic rates. The review will also examine improvements and reforms that can be made to the non-domestic rates system, seeking independent advice and working closely with business to ensure the system works well, and to provide the clarity, the confidence, the incentive and the transparency businesses need.”
