Major Aberdeen investor warns firms are ‘penalised’ by Scottish business rates

29/01/2024

ONE OF the biggest traders in Aberdeen City Centre has criticised the Scottish business rates regime and urged ministers to take action to protect the country’s fragile hospitality sector.

Mario Gizzi, the co-founder of DRG, which operates the Di Maggio’s in the Bon Accord Centre, Café Andaluz on Bon-Accord Street and Amarone on Union Street, wants a 75% rates relief grant to bring Scottish hospitality establishments in line with those in England.

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He has also called on the UK Government to use the March Budget to deliver a VAT reduction for the sector as it battles to recover from the devastating impact of the CV19 pandemic.

Scottish finance secretary Shona Robison rejected calls from the Scottish hospitality sector for business rates support, despite estimated consequentials of around £230million coming to Scotland as a result of the 75% rates relief afforded to businesses in England.

“In Scotland we need support with rates,” Mr Gizzi told the Scotsman.

“The current system is totally outdated and causes the licensed trade to lose 8.5% of turnover. We disagree with that. Good operators are effectively penalised for their success by paying more for the same premises that poorer performing businesses would – that can’t be right. 

“In England, hospitality firms receive relief on rates. We’d like to see the Scottish Government take the same approach to help stimulate the industry, encourage new businesses to the country, and reward them for running companies well. 

“At a UK level, a discounted VAT rate for hospitality would help. The same kind of firms on the continent pay far less VAT, and we’d like to see a rate of around 8%.

Meanwhile, business confidence in Scotland fell below the UK average with firms less confident then their English-counterparts about their future prospects.

Data from the ICAEW’s Business Confidence Monitor shows confidence remains positive at +2.0 in Scotland for the last quarter of 2023, but is down from +6.4 from the previous two.

The UK average (+4.2) is a marginal rise from previous showings, but is still below pre-pandemic levels.

Domestic sales and exports both grew at a higher rate in Scotland than the UK, with domestic sales rising at a rate of 5%, above the UK average of just 3.6%.

Profits growth is Scottish businesses was up 3.3% – again, more than the UK average – while the outlook for next year shows profits growth to reach 5.3% north of the border, and just 4.6% for the UK.

“With economic concerns continuing to weigh on Scottish businesses, the business confidence monitor presents a mixed picture, with sentiment down although still positive, and strong sales and profits growth which is set to continue,” said David Bond, ICAEW director for Scotland.

“Nevertheless, Scottish companies say they face a range of challenges, with the majority of our firms devoting too much time and energy to regulatory requirements.”

A majority of Scottish businesses said they were struggling with regulatory demands, while a quarter said they struggled with customer demand.

However, with cost pressures expected to ease this year, Scottish businesses said they expect sal

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