The Cabinet Secretary for Finance and Local Government today announced the Scottish Government’s budget for 2025-26. She described it as a budget filled with hope for Scotland’s future, aiming to renew public services and deliver new economic opportunities. Key announcements for Edinburgh’s businesses include a welcome 40% rates relief for most hospitality businesses (although not for retail and leisure premises, which are covered by the equivalent relief in England and Wales). Other announcements are summarised below. If you have any thoughts or feedback on any of the announcements and how they might affect your business, please get in touch with our policy team at policy@edinburghchamber.co.uk

Tax policy

• On Non-Domestic Rates, the Basic Property Rate will be frozen, whilst the Small Business Bonus Scheme will be protected
• For the 92% of hospitality businesses that are liable for the Basic Property Rate, they will receive a 40% rates relief in 2025-26, capped at £110,000 per business. This will increase to a 100% relief for hospitality businesses on the islands
• Grassroots music venues will also benefit from this relief.
• These measures will mean that over 95% of non-domestic properties in Scotland will pay less than equivalent properties in the rest of the UK
• Having previously considered reintroducing a Public Health Supplement for large retailers, the Government has now decided to drop these plans
• On income tax, there will be no new bands or increases for the remainder of this parliament, whilst the thresholds for the basic and intermediate rates will increase by 3.5% this year
• The Additional Dwellings Supplement on Land and Buildings Transactions Tax will increase from 6 to 8% from tomorrow (5^th December)
• From 1^st April 2025 the Scottish Landfill Tax will increase in line with the UK tax

Business support

• The culture budget will be increased by £34m for 2025-26, and a further £20m the year after – this means that multi-year funding can be provided for arts and culture organisations, and the budget for Scotland’s festivals will be doubled
• An additional £3m will go to help tackle retail crime
• £321m will be provided for the enterprise agencies to deliver a programme of support to help Scottish businesses to start and scale, be more productive, and access finance and attract investment.
• £15m will expand support for female entrepreneurs, boost the economic impact of universities, and fund the development of business clusters in advanced manufacturing and deeptech
• Investment of over £2bn will go to supporting Higher and Further Education to ensure they can remain competitive
• Regeneration funding to invest in town centres will be expanded, including for Pilton
• A public consultation on a Cruise Ship Levy will be launched in January 2025
• A further £200m will be invested in the Scottish National Investment Bank

The green economy

• The Government will tripe their investment in offshore wind to £150m, as part of their commitment to total investment of up to £500 million over five years. This is expected to leverage £1.5 billion in private sector investment
• £25m will be allocated to support the creation of new jobs in Scotland’s domestic green energy supply chain
• £300m of Scotwind revenue will be deployed for investment in jobs and measures to meet the climate challenge
• The Government will establish a hub for offshore wind in the North East to enable industry to better engage with public sector
• £300m will be invested in upgrading the heating and insulation of homes and businesses
• £90m will go towards protecting, maintaining and restoring peatlands and woodland
• £15m will be invested in flood protection
• £7.7m for Grangemouth to help secure a long term and sustainable future for the site

Public services, infrastructure and housing

• £768million will be invested in the Affordable Housing Supply programme, to deliver at least 8,000 homes for social rent, mid‑market rent and low‑cost home ownership this coming year. The Government will also work with the City of Edinburgh Council to unlock over 800 new net zero homes at the Granton waterfront development site
• A Housing Planning Hub will be created to help unblock major developments which have stalled within the system
• £100m will go towards accelerating access to full fibre broadband
• Additional investment will go into maintaining and enhancing Scotland’s rail network, ports and harbours, and ferry fleet
• Over £550m will be invested in critical safety, adaptation, maintenance and improvement priorities for our trunk road network
• Extra funding will be provided for the NHS to reduce waiting times, for schools to tackle the poverty-related attainment gap, for childcare provision, and for local authorities to reduce the need for large council tax increases next year
• Funding has been reinstated for a new Eye Pavilion in Edinburgh
• The Government will work towards mitigating the Westminster two child cap on benefits by 2026, lifting 15,000 children out of poverty