Investing in Glasgow Restaurants Doubles Your Rates

Scotland's business rates system calculates rateable values based on estimated hospitality turnover. Industry figures say this methodology creates a disincentive for investment and growth, particularly when property improvements trigger sharp valuation increases.

Jonathan MacDonald, co-owner of Glasgow restaurants including Ox and Finch, Margo, Sebb's and Ka Pao, notes that taking on a property with a rateable value of £40,000 or £50,000 and investing heavily in improvements can result in the rateable value rising to £150,000, which discourages further development. He notes that comparable-size bar units in Finnieston have a quarter of the rateable value of Ox and Finch, and that retail units in the same area pay only 15 or 20 percent of the rates bill. The current system determines a venue's rateable value by estimating the turnover a hospitality business could reasonably generate and multiplying that figure by the poundage rate. MacDonald argues that high turnover does not automatically equate to high profit, particularly for businesses that invest heavily in fresh, perishable ingredients and staff development to deliver a quality consumer experience. He adds that the existing framework, written for pubs in the 1970s with a uniform business model, does not reflect how modern restaurants operate, where most use fresh food and employ large teams. He gives the example of Ka Pao, Crabshakk and Nando's located in the same building on Vinicombe Street in Glasgow, where Crabshakk's rates are nearly double Nando's despite being a completely different business model, with fast-food operators using centrally produced food and hospitality venues employing 40 or 50 staff on the rota, ordering fresh food daily and cooking from scratch; in such cases, higher average spend per person of £18 or £20 rather than £5 or £6 drives the turnover figure without reflecting proportionate profit margins. He also states that rates bills can rise from £6,000 a year to £80,000 within a few revaluations, and that the system's unpredictability means businesses must carefully evaluate rate impacts before committing to improvements, as the financial outcome can be difficult to forecast. MacDonald says if rates were based on square footage and a clear formula, businesses could incorporate them into investment plans and financial projections.

Scottish entrepreneur Sir Tom Hunter has also publicly criticized the system, describing it as a tax on entrepreneurship and investment. He cited examples of operators who significantly improved their premises, including one hospitality business that saw its rateable value rise from £50,000 to £350,000 per annum after investing more than £1 million to restore the venue, while another faced an eight times increase after spending over £1 million bringing a restaurant back to life. He said this success is captured by the valuation system and translated directly into higher rates bills, which discourages investment, especially in sites that support town and rural regeneration. Business leaders in the sector argue the system unfairly uses estimates of achievable turnover when calculating rateable values, saying turnover does not reflect underlying profitability. They advocate for a system that taxes the property itself, not the business activity. The Herald is promoting a six-point Reset The Rates campaign calling for a fairer deal for hospitality and tourism accommodation.

The Scottish Government acknowledged many of the hospitality industry's concerns and announced an independent review of the non-domestic rates valuation as part of its 2025-2026 programme for government. The review was delayed following the reviewer's promotion to Solicitor General; its chair was subsequently changed and publication was postponed. Advocate Jonathan Murphy, who has practised in valuation for rating, has been brought in to lead the independent review, which is now scheduled to deliver its findings, though full implementation may take several years. Currently, some relief is offered to the hospitality sector, as well as retail and leisure, but it is not available to businesses with properties valued above £100,000. A Scottish Government spokesperson noted that reliefs worth in excess of an estimated £870 million are already available, with 96 percent of retail, hospitality and leisure businesses able to benefit from some form of relief. At the revaluation, shops in Scotland saw a six percent increase in total rateable value, compared to a ten percent increase in England. Sir Tom said he supports introducing a system based on the square footage of premises and extending the relief currently offered to the hospitality sector. He invited the review's chair to spend a day touring pubs and hospitality venues to hear first-hand the impacts on jobs, particularly for young people not in education, employment or training, and the broader economic value the sector provides. Deputy First Minister Jenny Gilruth said she has committed to a comprehensive review of non-domestic rates.

Original Sources: heraldscotland.com, heraldscotland.com, heraldscotland.com, heraldscotland.com, heraldscotland.com, heraldscotland.com, heraldscotland.com, heraldscotland.com

Category: Economics

Keywords: finnieston, glasgow, hospitality, macdonald, margo, murphy, poundage, profit, rates, retail, scotland, turnover

The article offers no actionable information for a normal person. It describes policy developments and official positions but provides no clear steps, choices, instructions, or tools that a reader can use soon. There are no actions a reader can take to assess personal risk, respond to the situation, or access practical resources. The piece exists only as a summary of what officials and advocates say, with no pathways for engagement or preparation.

Its educational depth remains superficial. It mentions how rateable values are calculated, references historical context, and gives examples of businesses in the same building, but it does not explain the formal mechanisms behind rateable value determination, what poundage represents, how appeals work, or provide statistics with context about their source or significance. No systems or reasoning are broken down to help a reader understand the topic beyond surface-level facts. The information does not teach enough for someone to grasp causes, effects, or broader patterns.

Personal relevance is limited to a small group with specific interest in hospitality operations, business investment, or Scottish local government. For a typical reader outside that context, the events described do not directly affect safety, daily money decisions, health responsibilities, or personal obligations. The article focuses on an isolated policy trend with no clear connection to the reader's life, and it does not explain how to determine whether such distant developments might indirectly impact personal circumstances. The relevance is narrow and does not meaningfully connect to real life for the general reader.

The public service function is not served. The article contains no warnings, safety guidance, emergency information, or anything that helps the public act responsibly. It simply recounts a political and legal development without framing that would enable a reader to respond safely or wisely. Because the event described is a specific legislative trend that will not change most people's immediate circumstances, the piece fails to fulfill a public service role and exists mainly as advocacy summary rather than a resource for responsible engagement.

Practical advice is absent. No steps or tips are given that an ordinary reader can realistically follow. There is no guidance on how to assess whether a distant policy change affects personal travel, purchasing, or local services, nor any suggestions for basic preparation or informed observation. The guidance that is implied is vague to the point of being unusable, and since no concrete, followable advice is offered, the article does not help a reader apply any takeaway to daily life.

Long-term impact is negligible. The article focuses on a current wave of policy developments and offers no lasting benefit for planning ahead, improving habits, or avoiding future problems. It does not teach how to recognize patterns, how to evaluate similar news in the future, or what to consider when such developments recur. A reader finishes with no stronger ability to make stronger choices or repeat fewer problems, because the piece provides no framework for ongoing awareness or decision-making.

Emotional and psychological impact leans toward creating alarm or helplessness without offering a constructive path forward. Phrases such as “significant disincentive,” “unfairly weighted,” “discourages further development,” and “the system's unpredictability means businesses must carefully evaluate rate impacts” are emotionally charged and intended to maintain attention, but they do not accompany any clarity, calm, or actionable response. The reader is left alarmed but without agency, which means the article harms more than it helps by amplifying distress without providing a way to channel it.

The language used is dramatic and at times overpromises on stakes to sustain attention. Descriptions of “disincentive,” “unfairly weighted,” and “unpredictability” rely on emotionally loaded claims that add no proportional information, directing reader focus toward alarm rather than understanding. This approach maintains attention at the expense of depth and risks manipulating reader sentiment without delivering commensurate value. While not overt clickbait, the framing functions similarly by prioritizing sensation over substance.

A clear missed chance to teach or guide exists. The article presents a problem—business rates system inequities and an outdated framework—but fails to provide steps, examples, context, or a way for the reader to learn more about how such systems work, how to assess personal impact, or what basic awareness looks like. It stops at reporting positions without offering a pathway to understanding or engagement, squandering an opportunity to inform or empower.

Adding real value that the article failed to provide

When any policy or development headline appears, it is helpful to treat it as a starting point rather than a complete picture. Different reputable sources will emphasize, omit, or frame the same events in distinct ways, and comparing them can reveal what is being highlighted and what is being left out. This practice builds a more balanced view without requiring deep expertise. A second step is to apply a basic risk check: ask whether the development is likely to affect your personal finances, travel plans, or local services in the near term. If the impact seems distant, there is usually no need for immediate alarm, but making a habit of checking a trusted news outlet or government website every few weeks can prevent surprise when changes do arrive. If a change could affect a cost you regularly pay or a service you use, simple contingency planning such as keeping a small reserve of set-aside funds, exploring alternative providers, and budgeting a modest buffer can provide peace of mind without requiring specialized knowledge. Perhaps the most useful habit is to pause before reacting to any claim that feels urgent or alarming. Ask what is being asked of you, what information is still missing, and what reasonable options you actually have. This pause creates space for clearer thinking and prevents decisions driven by incomplete or emotionally charged information. Finally, when any tax, fee, or regulatory change is reported, looking for the official explanation on the relevant government or authority website is the most reliable way to understand the actual criteria, thresholds, and any available exemptions or appeal processes. These documents are written in plain language and provide the factual basis behind the headlines.

The Scottish Government acknowledged many of the hospitality industry's concerns and announced an independent review of the non-domestic rates valuation as part of its 2025-2026 programme for government. The passage reports this government action but does not include the government's reasoning, valuation methodology, or any data supporting the current system. By presenting only MacDonald's critique alongside the brief announcement, the text creates a one-sided portrayal that frames the rates system as unresponsive to industry needs. This selective inclusion directs reader attention toward perceived unfairness without offering the administrative context or evidence the government may have considered. As a result, readers receive an incomplete picture of the policy landscape, shaping opinion through what is left unsaid rather than what is stated.

Jonathan MacDonald, co-owner of several Glasgow restaurants including Ox and Finch, Margo, Sebb's and Ka Pao, has characterized Scotland's business rates system as unfairly weighted against hospitality operators, stating it creates a significant disincentive for investment and growth. The phrases "unfairly weighted" and "significant disincentive" function as strong evaluative labels positioned before the description of the system's mechanics. Their placement primes reader interpretation toward disapproval and resistance before the valuation method is explained. This linguistic choice assigns moral weight to the system's design, steering perception while maintaining the appearance of neutral reporting of industry concerns. As a result, readers may interpret the rates framework as inherently biased without engaging with its actual calculation procedures.

At present, he says, one almost has to assume the rates bill will double if they invest and improve a property. This is presented as definitive financial guidance, yet it rests on an unverified assumption about revaluation outcomes. The phrasing "one almost has to assume" frames a speculative projection as a near-certainty, guiding reader expectation toward financial risk. By omitting any mention of rate stabilization mechanisms or historical revaluation patterns, the text supports a narrative of unpredictability that may not reflect the full system behavior. Consequently, readers receive advice shaped by untested assertions rather than evidence-based assessment.

Crabshakk's rates are nearly double Nando's despite being a completely different business model, with fast-food operators using centrally produced food and hospitality venues employing 40 or 50 staff on the rota, ordering fresh food daily and cooking from scratch. The text uses this comparison to highlight perceived inequity between contrasting business models within the same building. However, it omits how rateable value is officially calculated based on estimated turnover multiplied by the poundage rate. The juxtaposition directs reader focus toward unfairness without providing the methodological basis for the rate difference. As a result, readers may conclude the system is arbitrary, despite the stated valuation framework.

Anger and resentment surface when MacDonald calls the business rates system “unfairly weighted against hospitality operators”; this emotion appears at the outset and carries strong strength, serving to frame the issue as one of systemic injustice and to invite readers to sympathize with operators who feel targeted by a rigged structure. Immediately, the statement that investing in a property with a rateable value of £40,000 or £50,000 can cause the value to rise to £150,000, thereby “discouraging further development,” generates fear and alarm; this emotion is strong and is strategically placed to illustrate the tangible financial risk facing business owners, thereby discouraging impulsive investment without careful risk assessment. A comparison of Finnieston bar units having a quarter of the rateable value of Ox and Finch introduces indignation, a moderate-strength emotion that highlights perceived inequity within the same locality, steering the reader’s opinion toward the view that location-based valuation is arbitrary and in need of reform. The mention that retail units in the area pay only 15 or 20 percent of the rates bill creates surprise and disbelief, moderate in strength, and serves to suggest favoritism toward retail, influencing the reader to question the fairness of current allocations relative to hospitality operations. The explanation that the system estimates turnover by multiplying by a poundage rate, and that high turnover does not automatically equate to high profit especially for businesses using fresh ingredients and developing staff, generates empathy toward restaurant operators; this moderate emotion personalizes the struggle, making the reader more likely to sympathize with the human cost of the policy. A reference to the framework being written for 1970s pubs with a uniform model introduces frustration and anger about obsolescence, moderate in strength, and serves to argue that the rules no longer match reality, prompting the reader to accept the need for change. The specific example of Ka Pao, Crabshakk, and Nando’s in the same building, where Crabshakk’s rates are nearly double Nando’s despite different business models, generates shock and disbelief, strong in strength, and functions as a vivid illustration of inequity that directs the reader’s attention to the arbitrary nature of the current valuation method. The detail that fast-food operators use centrally produced food while hospitality venues employ large teams, order fresh food daily, and cook from scratch, with higher spend per person driving turnover without reflecting proportionate profit margins, induces frustration and resignation, moderate in strength, and aims to show that the metric used penalizes certain business choices, steering opinion toward the author’s proposed alternative. The Scottish Government’s acknowledgment of concerns and announcement of an independent review generates mild hope and optimism, as it signals that action is being taken; its strength is mild and its purpose is to reassure the reader that the situation is being addressed, though the subsequent delay following the reviewer’s promotion introduces mild disappointment and skepticism, which tempers the initial hope and encourages a cautious outlook. The note that some relief is offered but not to properties valued above £100,000 creates frustration and a sense of incompleteness, moderate in strength, and serves to highlight that partial fixes may leave many businesses behind, influencing the reader to demand more comprehensive solutions. MacDonald’s suggestion that rates should be based on square footage with adjustments for location, frontage, and floor level, like council tax, evokes idealism and trust in a simpler formula, mild in strength, and serves to present a defensible alternative that guides the reader toward evaluating simplicity versus complexity. The statement that under the current system someone can invest heavily and see rates rise from £6,000 a year to £80,000 within few revaluations generates alarm and a sense of inevitability, strong in strength, and aims to convey the system’s deterrent effect, discouraging investment without guaranteed financial safety. The observation that the system’s unpredictability means businesses must carefully evaluate rate impacts before committing to improvements introduces caution and worry, moderate in strength, and serves to promote prudent decision-making rather than reckless spending. Finally, the assertion that taxes should be measurable and defensible, and that a clear formula would allow businesses to build rates into financial projections, expresses confidence in rationality, mild in strength, and functions to align the reader with the author’s principle-based stance rather than emotional reaction.

These emotions function collectively to steer the reader’s response in specific directions. Anger and resentment expressed early on create sympathy for hospitality operators who feel targeted by a system that seems rigged against them, inviting the reader to view the issue through a lens of fairness and reform. Fear and alarm generated by the rateable value increase serve to warn the reader of the financial stakes involved, prompting cautious consideration rather than dismissive attitudes. Indignation and surprise at the disparity between similar businesses in the same area shift the reader’s opinion toward the belief that the current valuation method is arbitrary and in need of correction. Empathy toward restaurant owners personalizes the policy’s impact, making the reader more likely to advocate for changes that recognize the labor and ingredient costs unique to fresh-food establishments. Frustration with the outdated framework and the partial nature of current relief encourages the reader to question whether the proposed review will be sufficient, steering opinion toward the demand for more fundamental restructuring. Hope and optimism surrounding the independent review provide a sense that progress is possible, while the subsequent disappointment following the delay moderates that hope and fosters a realistic, watchful stance. Alarm at the potential for rates to quadruple after investment reinforces the idea that the system deters risk-taking, leading the reader to support alternatives that offer predictability. Trust in the author’s proposed square-footage-based formula aligns the reader with a rationality-based argument, positioning the author as pragmatic rather than merely critical. Overall, the emotional trajectory moves the reader from initial frustration toward a considered evaluation of the system’s flaws and a preference for reform that balances simplicity with equity.

The writer employs several linguistic tools to embed emotion within a predominantly factual framework, thereby increasing persuasive impact without resorting to overt exaggeration. Comparative language such as “a quarter of the rateable value,” “nearly double Nando’s rates,” and “£18 or £20 rather than £5 or £6” uses concrete contrasts to make abstract rate figures vivid and memorable, steering the reader’s attention toward the scale of perceived inequity. The strategic use of specific dollar and pound amounts, named businesses, and named government officials grounds the emotional claims in tangible detail, which builds trust by showing that the emotions are based on observable data rather than hyperbole. The narrative device of presenting a before-and-after scenario—investing heavily and watching rates jump from £6,000 to £80,000—functions as a dramatic illustration that makes the consequence of investment feel immediate and real, directing the reader’s thinking toward risk assessment. The reference to the framework being designed for 1970s pubs with a uniform model appeals to the emotion of frustration with obsolescence, while the mention of the reviewer’s promotion to Solicitor General introduces mild disappointment that tempers initial hope, a technique that prevents the reader from accepting the review’s effectiveness at face value. Throughout, the writer avoids overly charged adjectives in favor of precise descriptions, which maintains a clinical tone while still allowing emotion to emerge from the weight of the numbers and the logical connections drawn between business model choices and rate outcomes. This balance ensures that the reader remains engaged and persuaded without feeling manipulated, as the emotional cues are derived from the inherent contradictions and stakes within the described system rather than from loaded language alone.