THE hospitality industry has had hopes of significant tax relief at today’s Scottish Budget dashed after ministers declined to match a concession that has been granted by Westminster to firms south of the Border.

Finance Secretary Shona Robison froze the headline non-domestic business rate and introduced 100% relief for business rates for hospitality outlets on the islands, capped at £110,000 per business.

However, the Scottish Government declined to accede to demands from the retail, leisure, and hospitality sectors for 75% relief from business rates, a concession that has been granted to firms in England and Wales in the current and next financial years.

It also introduced a new income tax band, as widely trailed, at 45p for those earning between £75,000 and £125,140.

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In a joint statement, the Scottish Tourism Alliance, UKHospitality Scotland, the Scottish Licensed Trade Association and the Scottish Beer and Pub Association said:  "With estimated [Barnett] consequentials of around £230 million coming to Scotland as a result of the 75% rates relief afforded to businesses in England, the Scottish Government has squandered a golden opportunity to support one of the country’s most important sectors for the second year in a row. 

"The 100% rates relief which has been announced for hospitality businesses in our island communities is welcomed, given the economic disruption these businesses have experienced from years of underinvestment in our ferry infrastructure. However, this measure falls very short of what has been expected.  It is an extreme disappointment for tourism and hospitality businesses across Scotland.” 

The statement added: “The lack of business support measures will see many thousands of tourism and hospitality businesses facing acute financial challenges in the next year, tipping many into crisis.”

“It also entrenches the fact that it is now immeasurably harder to run a hospitality, leisure or tourism business in Scotland, than anywhere else in Britain. This is particularly highlighted by the decision not to support the sector with rates relief, at a time when pubs in Scotland are already closing at twice the rate of those in England.”

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Stephen Montgomery, director of the Scottish Hospitality Group, said: "We are sorely disappointed that the Scottish Government has not delivered new emergency support for Scottish hospitality. Unless a hospitality business is located on the islands, this Budget offers no new support to Scottish hospitality to survive the unprecedented challenge of rising costs, inflation, and the legacy of the pandemic.

“The very real implication is that many Scottish hospitality businesses will struggle to survive, and customers will see prices increase. This will be a bitter pill to swallow for thousands of Scottish hospitality businesses, given English hospitality businesses will be benefitting from a 75% business rates discount for the next year. Our attention will now be focused on helping those hospitality businesses survive what will be a very challenging year to come.

"However, we welcome the Scottish Government's commitment to exploring a long-term, fairer deal for hospitality on business rates. It is a ray of hope in an otherwise disappointing day for Scottish hospitality. This is a golden opportunity to deliver a fairer deal for Scottish hospitality once and for all. We have been engaged with the New Deal for Business Group for a number of months and it is time that the Scottish Government's actions matched their words. The Finance Secretary has committed to introducing a long-term, fairer deal for Scottish hospitality at next year's Budget. We will hold her feet to the fire to make sure she delivers on this promise."

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Murdo Fraser, for the Scottish Conservatives asked Ms Robison if the decisions on business rates and income tax leaves the new deal for business in “tatters”.

But Ms Robison said following Westminster spending patterns would have resulted in real terms cuts in investment for the NHS in Scotland.

“Business tax cuts in favour of NHS spending… that is not the priority of this SNP Government,” she said.

Ms Robison said in parliament after delivering the Budget that protecting NHS and frontlines services was the focus on the financial measures taken, and said that inflation, interest rates and energy costs were the main concerns of businesses.