Scottish ministers have been warned that a new package of business rates relief is merely a "sticking plaster", leaving firms facing "eye-watering" bills. The criticism follows Finance Secretary Shona Robison's unveiling of her draft budget for the 2026-27 financial year on Tuesday 13 January 2026.
Budget Measures Fail to Calm Business Fears
In response to a major rates revaluation that some fear could force closures, Ms Robison announced reductions to the basic, intermediate, and higher property rates. She also pledged transitional rates relief worth £184 million over the next three years. Additional support was targeted at retail, hospitality, and leisure businesses, offering relief worth up to £110,000 per business annually for those liable at basic or intermediate levels.
However, industry leaders were swift to condemn the measures as insufficient. 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," Mr Thompson said. "The increases facing our local pubs, hotels, restaurants and cafes over the next three years are still staggering."
Warnings of Investment Flight and Closures
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 offered to retailers in England, potentially making Scotland "materially less attractive as a location for investment".
The Federation of Small Businesses in Scotland labelled the budget a "missed opportunity". Its chairman, Guy Hinks, noted that while reducing the poundage rate and extending reliefs would help, for small firms facing hikes of up to 400%, the measures were "effectively a drop in the ocean".
Calls for More Action to Prevent 'Cliff-Edge'
Liz Cameron, chief executive of the Scottish Chambers of Commerce (SCC), acknowledged the budget offered a "glimmer of hope" but insisted firms needed more support. She cautioned that the transitional relief came after the SCC's "stark warning" that inaction risked pushing businesses to the brink.
Dr Cameron raised a critical issue: "For a small number of businesses, significant increases in rateable value risk pushing them beyond eligibility thresholds for support, creating cliff-edge effects despite no improvement in trading conditions." She urged the government to clarify how it will assist those at risk of falling through the cracks.
Across the board, business representatives united in a call for more ambitious intervention, arguing that without it, job losses and closures will accelerate under the sector's growing tax burden.
