Scottish Budget 2026-27 Updates

The Scottish Government has now published the Scottish Budget 2026–27, setting out planned changes to Non-Domestic Rates (NDR) ahead of the national revaluation due to take effect from April 2026.

Key statements within the Budget highlight reductions to property rates, the continuation of the Small Business Bonus Scheme, and targeted relief for retail, hospitality and leisure premises. However, despite the scale of the relief package, there is no commitment to pause or fundamentally reform the 2026 revaluation framework.

• The Budget document has now been published and can be accessed here.
• You can read the full proposed non-domestic rates measures here.
• Response from the Scottish Tourism Alliance here.

Key statements:

• “We have listened to businesses and understand the cost pressures which they continue to face. On Non-Domestic Rates, we will support businesses by reducing the Basic, Intermediate and Higher Property Rates in 2026‑27, given the forthcoming revaluation on 1 April 2026. We will provide transitional reliefs, and will continue the Small Business Bonus Scheme for the next three years, to remove 100,000 properties from rates altogether. We will also offer 15 per cent Non-Domestic Rates relief for the next three years for retail, hospitality and leisure premises liable for the Basic or Intermediate Property Rates (with a rateable value up to and including £100,000), capped at £110,000 per business per year.” (p7)
• “Acknowledging the impact of the revaluation, we are protecting business by introducing a Revaluation Transitional Relief to protect those most affected by revaluation, and will cap increases in gross bills up to the next revaluation in 2029. Increases in NDR gross liabilities due to revaluation will be capped at 15 per cent (cash terms) in 2026-27 for small properties, rising in subsequent years. This relief will ensure that the gross bills of around 60,000 properties are lower in 2026-27 than they otherwise would have been.” (p27).

Fiona Campbell MBE, CEO of the Association of Scotland’s Self-Caterers, said:

“The ASSC notes that there will be a rates relief package following weeks of sustained industry pressure. The devil will be in the detail, but questions remain as to whether this will be enough to help tourism accommodation providers survive and thrive. With unprecedented increases of up to 400% for self-catering operators, we cannot have a sticking plaster approach for one that requires urgent redress. The 2026 revaluation framework must be paused and reformed to secure the future of thousands of small businesses in Scotland’s vital tourism sector.”

Marc Crothall MBE, CEO of the Scottish Tourism Alliance (STA), said:

“Today’s Scottish Budget has acknowledged some of the intense pressure facing Scotland’s tourism and hospitality sector, but unfortunately, the levels of transitional relief and support announced to stabilise the industry and restore confidence still fall way short of what is needed now.

In the days and weeks leading up to the Budget, tourism and hospitality organisations, business groups, chambers of commerce, small business representatives and Business Improvement Districts were united in warning that failure to act on business rates would push businesses to the brink. While the Scottish Government has responded with a package of modest short-term mitigation, the underlying issues within the system remain unresolved.

The introduction of transitional relief, reductions to the basic and intermediate rates, and the modest 15% of non-domestic rates relief for retail, hospitality and leisure businesses will provide temporary breathing space for some, but not nearly enough to prevent potential closures and job losses. The continuation of the Small Business Bonus Scheme and 100% relief in islands and designated remote areas will be welcome for the businesses and communities most exposed to rising costs.

However, these measures do not respond to the scale of the challenge facing tourism and hospitality businesses across Scotland. Relief is capped, time-limited, and does not address the volatility created by revaluation or the cumulative burden of rising costs, leaving many businesses still on the precipice of commercial viability.

Recent STA research shows more than 70% of tourism businesses expect conditions to worsen. Nearly half are delaying or cancelling investment. 15% expect to make redundancies within months, and many have already cut costs as far as they can. There is no slack left in the system – margins are wafer-thin.

The options available to businesses in our sector are limited, and all will come at a significant and far-reaching cost.  Some businesses will try to raise prices, despite consumers having less money to spend, ultimately increasing customer expectations around quality, which raises concerns when the ability to invest and deliver that quality is so constrained.

Additional investment announced for VisitScotland, including funding to support the Rural Tourism Infrastructure Fund and continued backing for major cultural and sporting events, is welcome. This investment will help with destination promotion, regional infrastructure and short-term visitor demand, but it does not address the core cost, competitiveness and viability challenges facing tourism and hospitality businesses on the ground

Tourism is one of Scotland’s most important economic drivers, capable of accelerating growth and strengthening public finances. This Budget was an opportunity to stabilise the sector and put it on a path to deliver its full economic potential. While some short-term relief has been provided, the opportunity has not been fully realised.

The STA has set out a clear economic mandate for the next Parliament in our Holyrood Election Manifesto. As we move into the final months before the Scottish Parliament election, we are calling on all political parties to commit to a fairer and more proportionate business rates system that supports investment, jobs and long-term competitiveness.

Tourism and hospitality businesses want to invest, grow and support communities across Scotland. Without decisive reform, the consequences of continued uncertainty will be felt within and far beyond our sector.”

Stephen Montgomery, of the Scottish Hospitality Group, said:

“There are only some measures we can welcome in the draft budget, following what has been a devastating revaluation process for many licensed hospitality businesses. The mitigation of the 2026 business rates revaluation goes nowhere near far enough for the larger licensed hospitality premises in Scotland, who in many cases employ the most people.

“We are therefore disappointed the Scottish budget hasn’t helped Scottish licensed hospitality more, with a heavier burden falling on the larger premises yet again. The Government has stated they want to go further.

“We do welcome the Scottish Government commitment to progress the independent review of rates methodology for licensed hospitality ‘at pace’ and we look forward to playing a major part in that review”

“With the UK Government poised to u-turn on their business rates relief package for hospitality, the Scottish Government have pledged and committed to do the same, and pass any consequential resources to Scottish hospitality.  We would have preferred if the Scottish Government showed leadership rather than waiting for the UK to u-turn first, but we will work with government to improve this package.

“We would urge the Scottish Government to think again on the relief package, particularly for larger premises, and now press the Scottish Government to proceed with the proposed independent review of methodology on our business rates to deliver long term fairness. There is scope to help further in the short term too.”