STA Update: Scottish Government Budget 2024-2025 Statement – Highlights for Businesses
The Scottish Government has today, Tuesday 19th December 2023, announced its Budget for 2024-2025. Read the full publication here.
A summary of the the main headlines for Scottish tourism and hospitality businesses are outlined below:
-Deputy First Minister (DFM) opening statement: “At the heart of this budget is our social contract with the people of Scotland where those with the broadest shoulders are asked to contribute a little more.”
-DFM said Scottish Budget set in “turbulent circumstances.”
-The tourism budget is down 10.8% and will be £47m for 2024-25, compared to £52.7m during the last financial period. VisitScotland capital funding is down by 67%, from £7.9m to £2.6m, due to a reduction in funding available for the Rural Tourism Infrastructure Fund. VisitScotland revenue funding is down 4.5% to £38.6m compared to £40.4m last year.
–Inverness Castle is to receive a one-off investment of £2.6m.
-DFM ruled out passing on business rates relief like the UK Government, stating: “If I spent every penny of consequentials on business relief and tax cuts that would mean a real-terms cut to our NHS and other vital services.”
-Announced “number one ask of business” to freeze the poundage on the basic property rate, protecting businesses with a rateable value up to and including £51,000 from the impact of inflation. DFM said this would save rate payers £37m compared to an inflationary increase.
–Will maintain Small Business Bonus Scheme.
-“Recognise pressures” that hospitality sector faces and will be taking two actions through the New Deal for Business (NDFB) to be implemented in budget 2025-26:
1.Work with sector to explore long-term targeted solutions and better promotion of existing reliefs “rather than relying on short-term steps that do little for their future sustainability”, and
2.To examine with the Scottish Assessors the evaluation methodology for the hospitality sector to address concerns “that it’s not truly reflective of the experiences of these businesses.”
-In recognition of unique challenges faced by hospitality sector in island communities, in the current budget the Scottish Government will introduce 100% relief for hospitality properties in islands, capped at £110,000 per business.
-A new 45% income tax band will be introduced for people earning between £75,000 and £125,140.
–The top rate of income tax, paid by those earning more than £125,140, will also rise by 1p to 48p in the pound. It is estimated both these changes will raise £82m next year.
–The bands for the starter and basic income tax rate will be increased by inflation, but those paying the higher rate of 42% at £43,662 will be frozen rather than rising in line with inflation. The DFM said freezing the higher rate threshold would raise £307m.
-The Scottish Government announced it will fully fund the £144m council tax freeze.
-Next phase of the dualling of the A9 will be progressed in 2024-25, including commencing construction on the Tomatin to Moy section and advancing procurement and land acquisition for further sections.
-Around £2.5bn to be invested in public transport to support bus, rail and ferry networks – including over £425m investment in bus services through Network Support Grant and concessionary travel schemes; £434m to support Island communities through provision of ferry, port and harbour services; £1.6bn for rail to support passenger rail services, as well as the operation, maintenance, and renewal of rail infrastructure; and £220m for Active Travel.
-£358m announced to continue to accelerate energy efficiency upgrades and installation of clean heating systems, plus £49minvestment for Scotland’s transition to a circular economy.
-Increased funding for culture in 2024-25 by £15.8m, which will include restoring Creative Scotland’s budget. It was described as a “first step” in investing at least £100m more in arts and culture by 2028-29. Aim is to increase arts and culture investment in 2025-26 by at least a further £25m.
