SLE issued the warning amid continuing outcry from businesses across the country over the draft rateable values due to take effect from 1 April 2026. The rural business organisation said land-based enterprises – many of which had followed long-standing government encouragement to broaden their activities beyond traditional farming – risk being among the hardest hit.

Self-catering accommodation providers are among the worst affected, with cafes, farm shops, visitor toilet blocks, breweries and hotels also in the firing line.

Small-scale hydro schemes – promoted by successive governments as vital to decarbonising Scotland’s energy supply – now face rates liabilities 10 times higher per megawatt than major windfarm developments. SLE also warned of significant knock-on impacts for the wider rural economy, with suppliers and trade businesses that rely on land-based enterprises facing major uncertainty if diversified operations become unviable.

SLE is currently surveying its membership to build a fuller picture of how the changes are being applied across Scotland. Early feedback from members has already highlighted the scale of the impact, with one business in Argyll facing an increase of almost £50,000 in its tax bill, while another in Aberdeenshire reported that the loss of eligibility for small business relief means its business rates will go from £360 per month to over £2,500 per month. Several other businesses have also contacted SLE to warn they are facing significant increases that may endanger their businesses.

Anna Gardiner, Senior Policy Adviser (Business & Property) at Scottish Land & Estates, said: “Diversification is not a luxury for rural businesses – it is essential to their survival. Across Scotland, farms and estates combine traditional agriculture with non-traditional activities such as self-catering accommodation, which underpins local tourism, as well as small-scale hydro schemes, which contribute to our net-zero ambitions.

“These ventures require significant investment, but they provide the jobs and income streams that keep rural economies alive.

“The draft revaluation has completely overlooked these rural economic realities. The current business rates framework fails to recognise the fragile nature of many rural enterprises or the critical role that diversification plays in sustaining viability where core sectors are already operating on the tightest of margins.

“There is no evidence that the consequences of changing valuation approaches were properly assessed – despite their potential to affect business viability and local economic sustainability. SLE believes that rural impact assessments need to be carried out automatically for changes of this significance.”

Ms Gardiner continued: “We are deeply worried that many diversified rural businesses will now lose protection under the Small Business Bonus Scheme.

“Although academic analysis has questioned measurable outcomes, the perceived and practical benefits of SBBS are clear to the businesses that rely on it.

“Without an adjustment to the scheme, or targeted alternative relief for the rural sector, the risk of job losses and business closures is very real. It is not simply about putting planned investment on hold – it is an existential threat to many of these enterprises.”

The Scottish Farm Business Income survey, published by the Scottish Government, shows that the average farm made a loss of £22,500 from agricultural activities in 2023–24, but generated a profit of £6,200 from diversified activities such as property rental or energy generation. This underlines the critical importance of diversification to the resilience of the rural economy.

SLE added that it strongly supported concerns raised by the Federation of Small Businesses (FSB), the Association of Scotland’s Self Caterers, Scottish Agritourism, and the Scottish Tourism Alliance (STA) about the revaluation process.

The organisation also urged First Minister John Swinney to provide more detail as soon as possible regarding the actions being taken by the Scottish Government to address the issue.

Ms Gardiner added: “The process itself is troubling. The revaluation of self-catering businesses appears to rely on unrepresentative evidence and abandons a proven valuation method, resulting in increases so severe they threaten business survival and access to relief schemes.

“For small-scale hydro, it is inexplicable that a scheme can face a rateable value up to twelve times greater per megawatt than a wind farm. That disparity alone demands urgent scrutiny of the Scottish Assessors Association’s methodology and of ministerial oversight.

“At First Minister’s Questions, John Swinney said he was concerned about the detail of the planned changes and that the Scottish Government was examining the issue. Rural businesses across Scotland now need clarity on what that means in practice, and as soon as possible. The anxiety and uncertainty this has created has come at the worst possible time shortly before Christmas.

“Ultimately, these changes strike at the heart of rural sustainability. Diversified businesses provide the employment, services and investment that keep communities viable. Unless the Scottish Government intervenes, we risk undermining rural resilience and accelerating depopulation.”