SCOTLAND'S pubs, hotels and restaurants will have to apply for their promised cap on business rates, sparking claims by industry leaders of trade confusion and poor communication.

Just weeks after Finance Secretary Derek Mackay said rises would be capped at 12.5 per cent for the next financial year, hospitality businesses have been receiving unamended bills.

But they have been told by councils, who administer the collection of business rates, that the cap does not come automatically but will have to be applied for. Further letters will be sent within weeks explaining how to claim the relief.

Sources have told The Herald the short time lag between the minister's announcement and the new financial year has meant the Government and councils have had to speed through their plans, with the final mechanism for businesses to apply not yet completed.

One source said: "There is guidance coming out from ministers next week on this very issue but it is one of immediate concern to the councils administering this."

Paul Waterson of the Scottish Licensed Trade Association said: "There has been some confusion about how the cap will be implemented and what kind of consistent approach their will be from local authorities

"We will be meeting ministers and will have to be clear about questions that haven't been answered yet."

One business source said: "There is an issue around whether the Government has given sufficient guidance about how this would work or that indeed it wasn't an automatic cut. But the flip to that is if you're getting a significant tax cut it isn't too much of an onus to fill in a couple of forms."

A Glasgow City Council spokesman said: “The government has yet to issue guidance to councils and ratepayers on the application process; although we understand it is imminent. In the meantime, we felt it was important to update businesses before the first annual bills arrived.”

The SNP Government bowed to pressure in February amid claims new rates hikes would force many businesses to the wall and unveiled a £45m package of support.

After initially maintaining he had done enough to help firms through the first rates revaluation since 2010, Derek Mackay belatedly announced a raft of targeted reliefs for next year.

The move followed a campaign by The Herald highlighting the threat to jobs from hikes to bills in 2017-18, with some firms facing closure because of 400 per cent increases.

A Scottish Government spokesman said: “The Scottish Government has committed around £660 million of business rates relief next year, including around an additional £37 million specifically within the hospitality industry following engagement with the sector, while councils are empowered to apply further reductions to address any local issues as they see fit.

“The business rates cap announced for hotels, pubs, restaurants and other accommodation must be an application based scheme to comply with European Union State Aid rules and to ensure eligibility for the relief. It is up to individual councils to administer the relief.

“Any business that is concerned about its valuation should contact the local assessor and discuss how they worked out the value. All companies have until September to appeal.”