Scottish farms could be hit with tens of thousands of pounds a year in new rates bills under proposed changes to sporting rates, prompting warnings that the policy risks repeating the damage caused by the 'family farm tax' row.
Scottish Land & Estates (SLE) issued the warning after a meeting of the Scottish Parliament’s Rural Affairs Committee, where ministers and officials gave evidence on the Scottish Budget.
Under proposals announced by Finance Secretary Shona Robison last week, relief under the Small Business Bonus Scheme would be removed from sporting rates from 2026–27.
Only a limited exemption would remain, applying solely to deer or vermin control. SLE said the move was introduced without industry consultation and would affect far more than large shooting estates.
The organisation warned that any land where sporting rights exist could become liable for rates, regardless of whether shooting actually takes place.
With average farm business income for less favoured area livestock farms standing at just £17,400, according to the latest government figures, SLE said many family farms would struggle to absorb the additional cost.
Examples highlighted by the organisation include a small livestock farm in Orkney that relies on contractors to control geese, which are not classed as vermin.
Under the proposals, the farm would lose Small Business Bonus Scheme relief, threatening its ability to protect grazing land and remain viable.
In the Highlands, a medium-sized estate combining farming, renewables and deer management could be forced to increase commercial shooting or cut deer management jobs to cover the loss of relief.
Elsewhere, SLE said some small farms could be required to pay sporting rates for rights they neither use nor want, potentially pushing businesses to introduce shooting activity simply to remain financially afloat.
SLE said the proposals showed a disconnect between policy intent and how rural land management operates in practice.
Sarah-Jane Laing, chief executive of Scottish Land & Estates, said: “This appears to be yet another policy dreamt up in a central belt meeting room, with no grasp of the real-life impact it will cause to rural businesses, jobs and livelihoods.”
She said the change had been presented as targeting large estates, but warned the reality would be very different.
“Small and medium-sized family farms and landholdings – many of which carry out little or no commercial shooting – will be the ones paying a heavy financial price,” she said.
Ms Laing also warned the timing could not be worse, following the recent revaluation of non-domestic rates.
“The recent revaluation of non-domestic rates is a ticking timebomb for many rural businesses,” she said, adding that existing reliefs amounted to “little more than a sticking plaster on a system that is fundamentally broken”.
She said the policy could result in new rates bills running into tens of thousands of pounds a year, costs many businesses “simply cannot absorb”.
Ms Laing criticised the narrow scope of the proposed exemptions, arguing they fail to reflect how wildlife management is carried out to protect habitats, livestock, food production and infrastructure.
“There is a clear contradiction at the heart of this proposal,” she said, pointing to government commitments on biodiversity, climate action and sustainable land use.
“At the same time as the Scottish Government sets ambitious goals on biodiversity restoration and deer management, it is proposing to penalise the very people delivering those outcomes on the ground.”
SLE said it has approached the Finance Secretary with proposals to maintain eligibility for the Small Business Bonus Scheme, or at least broaden the exemptions, until the full impact of the changes is properly assessed.
“Rural Scotland has seen this movie before,” Ms Laing said. “Like the family farm inheritance tax saga, a policy devised in isolation is now threatening to inflict real damage on family-run businesses and rural communities.”
The Scottish Government has previously said the Budget measures are intended to ensure fairness in the rates system. Further scrutiny of the proposals is expected as the Budget process continues.
