The Scottish Government has announced the appointment of a new chair to lead an independent review into the valuation of licensed hospitality premises for non-domestic rates, igniting hopes within the industry for meaningful change.
According to the announcement, the Minister for Business, Trade and Innovation, Ivan McKee, has tasked the chair with examining “the way licensed hospitality premises are valued for non-domestic rates” and making recommendations for reform.
The hospitality sector, long calling for greater fairness in business rates – especially for pubs, bars and restaurants – has welcomed the decision. However, many stress that any review must lead to swift action, not just further consultation.
“We need a system that better recognises the particular challenges of pubs and bars,” one industry spokesperson argued.
Licensed hospitality venues are subject to non-domestic (business) rates based on the assessed value of their premises. Many venue-owners contend that current valuations do not adequately reflect seasonal fluctuations, declining footfall or the specific risk factors of alcohol-led establishments. The review’s outcome could lead to changes in the rates system, potentially lowering burdens for affected premises.
The chair is expected to explore several key issues, including:
- How premises are assessed and whether the current model sufficiently accounts for the unique business risk in hospitality.
- Whether the frequency and timing of revaluations support fair valuations.
- The potential for introducing new reliefs or modifiers specific to licensed premises.
- How to ensure transparency in the valuation process.
While industry bodies have cautiously welcomed the review, they emphasise that words must lead to action. Some of the feedback includes:
- Praise for the acknowledgment that pubs and bars operate under a different business model.
- Concern about how long it will take to implement any reforms.
- Calls for immediate interim support while the full review runs its course.
One comment said: “It’s a positive step, but what matters now is making sure the outcomes translate into reliefs that pubs can see in their bills.”
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The review is expected to publish an interim report before the next general revaluation exercise, with a full report and recommendations to follow. Stakeholders across the hospitality industry are already preparing submissions, data and case-studies to feed into the process.
For tenants and lease-holders of licensed premises, the review provides a moment of cautious optimism. If it leads to a more tailored and responsive rating system, it could help many venues remain viable amid rising costs and changing consumer behaviour.
Ultimately, the success of this review will depend on the government’s willingness to act on its findings and the speed with which any proposed changes are implemented.
