Non Domestic Rates Consultative Group Minutes 5 February 2026

Attendees and apologies

Attendees

• Ivan McKee, Minister for Public Finance (chair)
• David Lonsdale, Scottish Retail Consortium
• David Melhuish, Scottish Property Federation
• Jamie Mackie, Scottish Grocers’ Federation
• Marc Crothall, Scottish Tourism Alliance
• Graham Howarth, Newmark
• Gavin Stevenson, Night Time Industries Association
• Mike Grieve, Night Time Industries Associaion
• Paul Togneri, Scottish Beer and Pub Association (SBPA)
• Fiona Campbell, Association of Scotland’s Self-Caterers (ASSC)
• Garry Clark, Federation of Small Businesses Scotland

• Stephen Montgomery, Scottish Hospitality Group (SHG)
• Leon Thompson, UK Hospitality Scotland
• Pete Cheema, Scottish Grocers’ Federation
• Stacey Dingwall, Scottish Property Federation
• Colin Wilkinson, Scottish Licensed Trade Association
• Les Robertson, Institute of Revenues, Rating and Valuation
• Heather Honeyman, Scottish Assessors Association
• William McFarlane, Scottish Assessors Association

• Scottish Government officials

Apologies

• Brian Rout, Scottish Assessors Association
• Robert Nicol, Scottish Assessors Association
• Liz Cameron, Scottish Chambers of Commerce

Items and actions

Welcome and Update from Chair

The Minister for Public Finance welcomed members to the meeting and noted the apologies received. Minutes of the meeting on 15 January 2026, as amended, were agreed. The Minister reminded the meeting that he had issued a letter on 3 February confirming the appointment of the four members of the Licensed Hospitality Valuation Review Group and noted that the Advisory Panel would be set up soon and a call for evidence issued shortly. 

Views on further support in Scotland following Chancellor’s announcement 

The Minister reiterated the Scottish Government’s commitment to passing on, in full, any consequentials arising from the Chancellor’s announcement on 27 January of further support for pubs in England. He told the meeting that consequentials will be confirmed as part of the UK Spring Statement in March but a figure of around £8 million is anticipated for 2026-27. The Minister invited members to share their views on how the funding could best be used to further support business in Scotland. 

Colin Wilkinson called for licensed hospitality to be prioritised.

Paul Togneri told the meeting that the funding should go to pubs. He pointed out that the Welsh Government has supplemented its anticipated £5 million in consequential funding with an additional £3 million. He added that guidance on how to calculate final NDR bills is also needed by the sector as soon as possible. 

The Minister reminded the meeting that in England, the additional support is going to music venues as well as pubs. 

Gavin Stevenson suggested that the funding should be focussed on pubs and music venues and more funding should be provided by SG to top up the anticipated funding of £8 million. He also asked that uplifts in rateable values as a result of the 2026 revaluation be frozen until the publication of the Gill Review.

Leon Thompson indicated that while a hospitality-wide allocation would be preferable, this would not have a significant impact on individual pubs and therefore it would be reasonable to retain the funding for pubs and music venues. He asked if there was any outstanding unspent funding from less-than-full-take-up of the 2025-26 relief and if so, if it could added to the £8 million figure. 

Stephen Montgomery told the meeting that the Independent Review is an admission that there is an issue with the methodology used to calculate rateable values for licensed hospitality and the funding should be used to support all licensed hospitality premises, not just pubs. He added his view that businesses do not claim the reliefs they may be entitled to because they don’t know how to apply or don’t have the time. He reminded the meeting that he had asked for a set of FAQs on how reliefs will operate in 2026-27. 

Fiona Campbell told the meeting that the ASSC has presented documented evidence of the material risk created by the draft revaluation and showing that people will leave the self-catering sector as a result. In its opinion, the methodology used to value self-catering properties is not working and it wants to work with assessors to identify an alternative methodology for the sector. The ASSC is seeking a pause in the revaluation for the self-catering sector, which it argues ministers could facilitate using existing powers. The ASSC is of the view that if the SG does not respond to the situation it will amount to a failure of policy design. She added that the revaluation of the licensed hospitality sector should also be deferred until the publication of the Independent Review. 

Graham Howarth asked that the SG reconsider the subsidy aid limit and follow the practice in England, where relief isn’t subsidy aided. 

Marc Crothall pointed out that there are some notable anomalies in draft valuations in the self-catering and licensed hospitality sectors. He presented the example of a self-catering business whose non-domestic rates have increased by 628% at the draft revaluation. In his view, values like this require amendment as soon as possible and he suggested that the £8 million could be used to help businesses that are at risk of not surviving as a result of the 2026 draft revaluation. 

The Minister asked if the reliefs that would be available to the business in question had been taken into account and Graham Howarth indicated a willingness to speak to the business about this. 

Fiona Campbell told the meeting that the ASSC was also aware of this business’s situation but while transitional reliefs would be available they would merely slow down the demise of the business in question. She offered to put the business in touch with the Minister. 

The Minister asked members if they were suggesting that transitional reliefs were of no value to businesses such as the one under discussion. 

Marc Crothall stated his belief that transitional reliefs had been taken into account but that the owner had stated that these were not sufficient to make his business a viable one. He offered to share the figures relating to this business with the Minister. He also made clear that not every business was in a similar position but there were anomalies that required addressing and even with reliefs, there is a risk that good businesses will be lost. 

Stephen Montgomery provided an example of an SHG member in Glasgow facing a 500% increase as a result of the draft revaluation. He called on the SG to follow Northern Ireland and pause the 2026 revaluation but also suggested that the £8 million could be used to pause the increases across the licensed hospitality sector. He added that continued SG focus on the 96% of businesses who are receiving some form of relief doesn’t acknowledge the 4% that are not. He also stated that NDR increases are not the only factor putting pressure on businesses but could be regarded as the final straw and he called on the SG to pause the revaluation. 

William McFarlane told the meeting that he wasn’t aware of representations relating to the example given and asked if the business in question had been in touch with the Glasgow assessors’ office to discuss their draft revaluation. If they hadn’t he encouraged them to do so as he noted it would be helpful to have a conversation with the business to either identify if there was an issue with the revaluation figure or to explain how the figure had been reached. 

The Minister reminded the meeting of the overall average increases in rateable values and the number of businesses that have seen a reduction in their rateable values as a result of the draft revaluation. He also reiterated that a package of reliefs has been put together to reduce the impact of these increases. 

Gavin Stevenson acknowledged that assessors have to follow the methodology but there are cases that appear to be anomalies and many publicans are now working for minimum wage because there is so little profit in the business and therefore no money left to pay increases in rates. He added a lot of this is down to tax pressures from the UK Government but SG has the powers to also not increase businesses’ rates. 

The Minister summarised the comments received, telling the meeting that he had received a clear steer that, apart from self-catering, pubs and music venues are the priority for funding support. 

Update from Assessors

Heather Honeyman provided a general update on the work of the assessors, which includes a focus on facilitating pre-agreements before the deadline on 20 February 2026. She reminded the meeting that non-domestic rates are a property-based tax, revaluation is a fresh look at property values and profit margins do not play a part in assessments. She noted that Assessors are following the legislation as it is drafted and it is for the courts to decide whether the correct value has been calculated, adding that a court may reach a different conclusion to the assessor and overrule their decision. 

Paul Togneri commented that the NDR system is no longer workable, the legislation is redundant and that the SBPA can report investment in the sector is going to England rather than Scotland because poundage rates are lower. 

William McFarlane informed the meeting that the NDR legislation has been updated and modernised, and that Assessors are always looking to identify rental values for properties but it is not their role to set rental values in the first place. 

Jamie Mackie asked what the SG’s long-term plans were for NDR because while the 15% relief and poundage reduction were welcome, it wouldn’t solve long-term issues, such as the failure of the NDR regime to recognise the benefits of the retail sector. 

Heather Honeyman commented that in the view of the assessors, the revaluation system isn’t broken, as has been suggested, and the revaluation process is open to a full legal challenge. 

The Minister reminded the meeting that the Independent Review of Licensed Hospitality methodology would include looking at alternatives. 

Stephen Montgomery told the meeting that the NDR system is broken but the problems for businesses are being caused by a raft of added costs as well; people aren’t going out as much as they were, which is reducing business profits, so there is insufficient money to pay increased NDR bills. The combination of affordability and methodology are causing the problems. He asked whether the poundage would be reduced if valuations were reduced down.

The Minister pointed out to the meeting that compared to the pre-Covid figures (adjusted for inflation), the income coming to the SG in 2026-27 is 6% than it was pre-Covid in real terms. 

Gavin Stevenson told the meeting that other costs are linked to rateable values, such as water charges, and Sky and BT Sports bills, and these are equally unaffordable for businesses, especially pubs - this is why there is a call to freeze bills this year. 

The Minister acknowledged that the link between NDR bills and other bills was an important one. 

Fiona Campbell asserted that while the ASSC was not objecting to revaluations in principle, the methodology used to value self-catering rateable values is wrong, the self-catering Practice Note is not working and the 2026 draft revaluation should be paused. She added that a similar issue arose from the 2023 revaluation which led to self-catering properties being moved from the NDR roll and onto the council tax list. She noted the ASSC had sought to work with assessors from April 2025 regarding their concerns with the 2026 revaluation but had not been afforded the opportunity to do so. 

Heather Honeyman reiterated that assessors are obliged to consider rents when carrying out valuations and have a body of evidence to follow in Scotland. 

Les Robertson took up the point raised about properties being moved from the valuation roll - in 2024-25 in Fife 156 self-catering properties were moved, mostly because they did not provide the information sought by the assessors. He emphasised the importance of responding to requests for information by the assessors and a failure by businesses to do this creates a considerable administration bill for councils who have to deal with the consequences. He made reference to the legislation that allowed property owners additional time to submit evidence to assessors relating to their 2023-24 figures. 

The Minister told the meeting that they should not assume that a similar window would be open in future years. 

Fiona Campbell suggested that all interested parties should work together to make digital communication the primary information channel. Heather Honeyman reminded the meeting that the assessors’ Portal allows ratepayers to self-serve and provide their return by email. 

AOB

No other issues were raised. The Minister thanked members for attending.