The changes to business rates in Scotland announced are both mixed and confusing, however smaller, mainly independent pubs, are being hit with business rates relief being slashed from the current 40% to just 15% from April 2026. This is a significant blow to these important pubs, during this serious crisis with sky high energy bills, rising prices and customers also facing reduced spending.

Some larger pubs, with rateable values up to £100,000 are to receive the same relief, which is welcome, but due to the slashing of the relief for smaller pubs, rather than supporting the sector, the Scottish Government is just robbing Peter to pay Paul.

The Scottish Government announced a reduction in the basic property rate to 48.1p, the intermediate property rate to 53.3p and the higher property rate to 54.8p. However this – and a very modest £184m transitional relief package spread over the next three years – will not compensate most pubs for the hike in business rates that will happen when the next revaluation kicks in, also on 1^st April 2026.

This revaluation will see rateables value increase, despite the low margins of pubs and publicans, especially smaller ones. Pub rates are currently overvalued, as the assessments don’t properly take into account the very tough trading conditions and low margins, which have been made worse due to sky high energy bills, rising prices and increasing costs, such as the hikes is employers’ national insurance and the minimum wage.

On top of this, Scottish pubs and bars have been at a significant disadvantage compared to those in England, meaning more support was needed from the Scottish Government – which it has failed to deliver.   

The Campaign for Pubs is calling for genuine reform of the broken system of calculating business rates for pubs in Scotland, to better reflect the reality of pub profits and ensure pubs and bars can survive and continue to serve communities and attract tourists. Pubs pay significantly more than other kinds of businesses and even more so compared to online retailers, which do not have the same cost challenges as physical businesses.   

Due to uproar from pubs and publican in England and Wales, the UK Government has announced they will make a U-turn on their recent proposed business rates changes and the Campaign for Pubs is urging the Scottish Government to make similar changes once this is announced, to ensure pubs in Scotland are not discriminated against.    

Morag Douglas, Morag Douglas, Scottish Spokesperson of the Campaign for Pubs and licensee at The Star, Burntisland said:

“This is not the Budget needed from the Scottish Government, to support Scotland’s pubs and publicans through the cost-of-living crisis.

“Smaller pubs will be badly hit by the reduction in rates relief from 40% to 15% and whilst larger pubs will at least have the same relief, it is clearly at the expense of smaller independent ones, which is not support at all, just robbing Peter to pay Paul. A mere 15% relief and the proposed transitional relief doesn’t address the revaluation which will see rates bills pushed up in April.

“The modest concessions are all transient and what is fundamentally required is a review of a system which is disproportionately harsh on hospitality in comparison with their high street neighbours, never mind online retailers who don’t have anything like the same costs. Scottish pubs need permanently lower bills – and a fairer way of assessing their rateable value and we urge the Scottish Government to work with us to deliver this”.

Greg Mulholland, Campaign Director of the Campaign for Pubs said:

“The Scottish Government continues to overtax Scotland’s pubs, especially smaller independent pubs, taking far more than in reasonable from these vitally important community hubs, but low margin businesses.

“The confused and mixed package of measures announced in the Scottish budget does not address the historic unfairness of the business rates system to pubs, nor the fact that Scotland’s pubs have had significantly less support than pubs in England since the pandemic.

“There needs to be reform of the whole system and a solution that addressed the unfair business rates burden faced by pubs in Scotland, that better reflects actual turnover and profit levels. We also urge the Scottish Government to act once the UK Government has announced its U-turn on business rates for pubs in England and Wales. Pubs must be given the same support as pubs in England, to ensure they can continue to serve their communities and maintain their key role in Scotland’s appeal to visitors and tourists”.  

ENDS