Gill Review Should Address ‘Acute’ Business Rates Challenges

Analysis from UKHospitality Scotland found that Scottish pubs and hotels are routinely valued significantly higher than their equivalents in England, driving higher business rates bills. Valuations could be as much as £16,000 higher for a typical pub.

This variance highlights yet another way in which Scottish hospitality is at a competitive disadvantage.

While it’s positive the valuation methodology is being examined by the Gill Review, the Scottish Government needs to go further to properly fix the faults in the business rates system.

UKHospitality Scotland has submitted a number of recommendations to the review, including how to address the broader implications of relying on a property tax-based system. Its recommendations include:

• Consider wider policy levers.The Scottish Government should consider measures beyond valuation alone, including a lower poundage rate for hospitality and relief structures.
• Establish an industry engagement forum.This can inform the development and ongoing review of valuation methodology.
• Commission independent analysis.An independent expert body should conduct analysis of hospitality property valuation to support future reforms.

Leon Thompson, Executive Director of UKHospitality Scotland, said: “The broken business rates system continues to plague Scottish hospitality businesses, often leaving them with higher bills and at a competitive disadvantage to their peers across the UK.

“The Gill Review is an important opportunity to bring forward significant reforms that address these acute challenges, which are stifling growth on the high street, investment and job creation.

“There has been recognition elsewhere that hospitality should be treated fairly by the business rates system, after decades of overpayment. The Scottish Government also needs to take that approach by looking at lower poundage rates for hospitality, as well as reforming the valuation methodology.

“It’s not fair or logical that a typical pub in Scotland could be valued significantly higher than an equivalent pub in England, leaving them with higher bills. The Gill Review can and should put forward significant reforms to fix the broken business rates system.”