Your hotel bill, sir? I'm afraid we'll have to charge you an extra £193,000

Published on Wednesday 17 March 2010 21:44

HOTEL bills are set to increase in Scotland – but it will be the owners, rather than the guests, who are complaining.

Almost 150 hotels face hefty tax increases totalling 3 million as rates go up by more than 100 per cent. The single biggest increase, at the Radisson in Glasgow, is 192,550 to an annual bill of 517,500.

Business leaders fear the new rates will further damage hotel profits as the industry struggles to cope with the after-effects of the recession. To cover the higher tax bill, the sector will have to sell an additional 35,000 nights on top of figures achieved last year. These were boosted by the Homecoming event, which provided a shot in the arm for the Scottish tourism industry.

Business leaders and opposition MSPs have argued for a more gradual increase. However, with 60 per cent of hotels actually seeing their rates fall, the SNP and Scottish Conservatives voted down proposals for transitional relief in the Scottish Parliament yesterday.

CBI Scotland director Iain McMillan said: "We're not happy that (finance secretary] John Swinney has rejected the business community's advice. We're living in times of severe economic restrictions and businesses have to make sure costs are kept under very strict controls."

Edinburgh Chamber of Commerce chief executive Ron Hewitt added: "Mr Swinney says it evens out overall, but it does not even out for individual businesses. By choosing to abandon transitional relief, the Scottish Government is leaving some middle-sized businesses in a difficult position."

Business rates are calculated through rental values of properties owned. However, hotels rates are calculated every five years based on turnover. The new hotel rates, effective from next month, are based on turnover in 2008.

James Thomson, proprietor of Prestonfield House, in Edinburgh, said: "This is a tax for being successful in the past. Just because you were successful in the past doesn't mean you will be in the future or the present. It's a slap in the face for anyone who shows any sign of entrepreneurship."

The Liberal Democrats' justice spokesman, Jeremy Purvis, said:

"Their competitors in England and Wales are being helped by the UK government's transitional relief scheme, but Scottish hotels have been left to fend for themselves."

Labour MSP Lewis Macdonald said the tax bill for a new Jurys Inn in his Aberdeen constituency had increased by 95,800 months after it opened.

He said another city hotelier told him he needed to find an extra 8,000 and warned that there might be three redundancies to balance the books.

Mr Macdonald said: "All sorts of services used by visitors to Scotland have been hit, from village petrol stations in rural Clydesdale to fashionable shops in the west end of Edinburgh. But it is hotels that have been hit worst of all, because their revaluation is based on their turnover in 2008, before the recession really hit home."

A Scottish Government spokesman said: "Having thought long and hard about the merits of introducing a transitional relief scheme, we are firmly decided that not doing so is the right course of action.

"Sixty per cent of businesses in Scotland will be better off as a result of revaluation. To introduce transitional relief would involve taking money off the majority of businesses that should legitimately see savings."

He added: "It would increase bills for high street businesses and small and medium enterprises by almost 70m."

How the highest hotel increases check out

THE top increases facing Scottish hotel companies are:

RADISSON, Glasgow

increase192,550

HILTON, Glasgow

120,025

HOLIDAY INN, Corstorphine, Edinburgh

118,090

St ANDREWS BAY, Fife

117,432

CROWNE PLAZA, Glasgow

106,435

JURY'S INN, Aberdeen

95,800

MARRIOTT HOTEL, Dyce

82,375

EXPRESS HOLIDAY INN, Aberdeen

79,600

MARRIOTT, Dalmahoy, Edinburgh

70,417

PRESTONFIELD, Edinburgh

68,186

MARCLIFFE, Pitfodels, Aberdeen

62,115