Jennifer Young

That said, with a focus on renewable energy, tax reliefs, and sector-specific funding, the budget could present various opportunities – and indeed challenges – for businesses across the country, particularly in Aberdeen, which has been designated as a hub for renewable energy initiatives.

Plus, the Additional Dwelling Supplement (ADS) has now also increased, and may deter some buyers, potentially impacting demand and property values in this sector.

Here’s what we know just now and what businesses may need to consider from a legal perspective.

Business rates and tax reliefs

The budget includes several measures the government says are intended to alleviate financial pressures on businesses:

• Non-domestic rates relief: 92 per cent of hospitality businesses will benefit from a 40 per cent relief in the 2025-26 fiscal year. Music venues are fully exempt from non-domestic rates
• Small business bonus scheme continues

Legal considerations for businesses:

• Eligibility and application: businesses should assess their eligibility for various reliefs and ensure timely applications to benefit from available support
• Appeals process: companies contesting their rateable value may need legal guidance to navigate the appeals process effectively

Business rates have long been a bone of contention here in Aberdeen with businesses facing challenges with disproportionately high business rates, particularly following the 2015 revaluation, which did not account for the subsequent regional economic downturn in the region.

This budget’s measures, such as the continuation of the small business bonus scheme and targeted reliefs for specific sectors, may offer some respite. However, the overall impact on Aberdeen businesses will depend on individual eligibility and the specific rateable values.

Renewable energy hub in Aberdeen

The Scottish government has announced it’ll set up a renewable energy hub in Aberdeen, with £150 million allocated to the offshore wind supply chain, expected to attract £1.5 billion in private investment.

This move complements the UK government’s decision to base the headquarters of Great British Energy in the city. And the Scottish government’s commitment to using the ScotWind revenues for the long term investment it should be spent on will be welcomed across the energy sector.

With supply chain opportunities and collaboration potential for businesses with research institutions, it reinforces the Granite City as an important player in the energy transition and could help create opportunities for local businesses in the renewable energy sector and foster economic growth. That all chimes with the positive messaging shared at this week’s OEUK breakfast briefing in Aberdeen, with the caveat from that event being the need for real momentum at a critical time – “deeds not words”.

From a legal standpoint, businesses will need to consider contractual agreements – whether that’s negotiating terms or ensuring regulatory compliance. I’d also expect intellectual property to be a hot topic, with protecting innovation front of mind. And, inevitably, whether the planning and consent system is fit for purpose to support commercially available projects will continue to come under scrutiny.

Sector-specific funding

The budget allocates funds to:

• Town centre regeneration: £62m is designated to revitalise urban areas, supporting businesses in retail, hospitality, and services
• Enterprise agencies: Funding of £321m aims to support emerging technologies and foster business innovation
• Rural tourism infrastructure fund (RTIF): Re-established to support tourism-related businesses and infrastructure in rural areas

Here, businesses may need support with applications, compliance checks and – again – contractual arrangements. In terms of property agreements, regeneration projects could involve leasing, purchases or planning permission that needs legal input.

Investments in infrastructure and housing

The budget included over £700m to deliver 8,000 new homes including social rent, mid-market rent, and low-cost ownership options as well as transport improvements.

For the construction sector, developers and contractors will need support on contracts and compliance while businesses affected by transport developments may need support with land use agreements or compensation claims.

Residential property – Additional Dwelling Supplement and Land and Buildings Transaction Tax (LBTT)

There will be a change to the Additional Dwelling Supplement (ADS) that has taken effect. Property purchasers must pay this tax up front as part of their purchase when they buy a new residential property and own another.

The ADS has risen from six to eight per cent on transactions completed on or after 5 December 2024.

Transactions where legal missives were concluded on or before 4 December 2024 are exempt. This change is expected to raise over £30m in additional revenue for the 2025-26 fiscal year, according to the Scottish Fiscal Commission.

Companies should also be aware that ADS applies to purchases of residential properties with a transaction value of above £40,000.

Buyers who later qualify for ADS refunds (for example if they sell their main residence within the relevant period) will need assistance navigating that process too. For any transaction ADS applies to after 1 April 2024, purchasers have 36 months to dispose of their other residential property to be able to reclaim the tax.

The circumstances in which ADS can apply can be complicated, particularly if you are buying as a couple, so checking in with your conveyancing solicitor is highly recommended. And, as the cut off has now passed, purchasers involved in transactions should speak with their solicitor as soon as possible to understand their position.

There are no changes to the LBTT residential rates and bands with first-time buyer relief staying in place. This relief sees the nil rate band threshold rise for eligible buyers from £145,000 to £175,000: saving up to £600 in tax.

The Scottish budget – balancing opportunities and challenges

The Scottish budget appears to offer various opportunities for businesses, particularly in renewable energy, hospitality, and innovation sectors. However, the impact will vary depending on eligibility for reliefs and funding, as well as sector and location.

Careful planning and expert advice will be essential to navigate the complexities and ensure businesses are best placed to make the most of these opportunities.

Jennifer Young is a partner at Ledingham Chalmers