Trade body UKHospitality is calling for an urgent action to avoid rocketing business rates bills for thousands of businesses next April.
With current business rates relief set to end on 31 March next year, UKH says it wants to avoid a cliff edge scenario where pubs and restaurants could potentially be facing business rate hikes of tens of thousands of pounds.
One example cited was for a pub with a Rateable Value of £80,000 which could see its rates increase by almost £33,000, if relief were to end.
UKH is calling for a permanent, lower and universal hospitality multiplier* to help “rebalance” business rates – a move that is backed by the Hospitality Sector Council, made up of experts from across the sector.
Kate Nicholls, Chief Executive of UKHospitality, said: “It’s imperative that the Government addresses the looming business rates cliff edge at the upcoming Budget, as the sector’s ability to both survive and thrive depends on it.
“A new, lower multiplier for all hospitality businesses would begin to rebalance a broken system that is weighted against bricks and mortar businesses, and a permanent solution would provide some certainty and stability for businesses that desperately need it.
“Without action, venues will be placed under yet more strain, giving them no choice but to divert funds that could be spent on investment and growth into paying the bills.
“While we recognise the financial challenges the new Government faces, it would be frankly irresponsible not to support a sector that generates £140 billion in revenue every year and employs more than 3.5 million people.
“This is a sector that has shouldered an enormous amount of cost over the past four years and should be supported to realise its potential to generate significant growth in communities the length and breadth of the UK.”
In its Budget submission, UKHospitality is asking the Chancellor to:
- Deliver its manifesto promise to rebalance the business rates system through a lower, permanent and universal hospitality business rates multiplier.
- Support enhanced back-to-work schemes and reform of the Apprenticeship Levy to help reduce economic inactivity and improve social mobility across hospitality.
- Promote growth by unlocking the commercial planning system, including fast-track planning approvals.
- Reduce employer National Insurance Contributions to support businesses increasing wages.
- Support green investment in the sector by reforming investment credits so they can be offset against employment taxes, rather than corporation taxes.
- Reform VAT for the sector to bring it in line with European rivals, making British tourism competitive, stimulating demand, creating new jobs and allowing businesses to reinvest.
*The business rate multiplier represents the number of pence in each pound of the Rateable Value that is payable in business rates before any relief or discounts are applied. It is set by the government each year and increases in line with the inflation (CPI) unless there is a specific intervention.