To ask the Scottish Government what its position is on whether Scotland-based retail, hospitality and leisure firms that will be liable for the higher property rate in 2026-27 will be better placed to pay a higher non-domestic rate than their counterparts in England in similar sized premises.
Following the extended relief announced at Stage One of the Budget Bill, the Budget ensures the estimated revenues raised from non-domestic rates in 2026-27 will be 7% lower in real terms measured by the Consumer Price Index than pre-COVID despite the number of properties on the valuation roll increasing in that time. It sets out a decrease in the three non-domestic property rates, including a 3.5% decrease in the Higher Property Rate, from 56.8p to 54.8p.
Decisions on Budget are made in the context of the prevailing economic conditions and government priorities. We have had to consider how best to target support within limited finances but also acknowledge that it is no longer possible to directly compare tax rates between Scotland, England and Wales due to differences in the tone dates used to derive Rateable Values. Different tone dates and by extension different impacts on Rateable Value growth, merit different decisions on tax rates and do not necessarily translate to higher liabilities.
The non-domestic rates liability that applies to a property depends on the interaction between its rateable value, the tax rate that applies and any reliefs that it is in receipt of. Total rateable value (local list) is expected to rise by 19% at the 2026 revaluation in England but only 12% in Scotland.
By way of example, shops are expected to see an increase in total rateable value of 6% in Scotland and 10% in England. Hotels’ total rateable value is expected to rise by 28% in Scotland but 79% in England, while for pubs this is 15% in Scotland but 30% in England. For restaurants the overall increase is expected to be 8% in Scotland while the total rateable value increase of restaurants and cafes in England is expected to be 15%.
Given the context of higher rateable value growth in England, the relief available to retail, hospitality and leisure properties liable for the Basic and Intermediate Property Rates in Scotland still compares well with the support available to equivalent properties in England.
The Budget continues to support businesses and communities, with a strong non-domestic rates package, including more than £180million of forecast support through transitional relief schemes over the next three years.
We believe that the relief package proposed in Budget strikes a fair balance and estimate that 96% of retail, hospitality and leisure properties could benefit from some form of relief in 2026-27.?
