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End of business rates relief is billion-pound ‘cliff edge’ for hospitality

Trade body UKHospitality has warned that the end of business rates relief will bring with it a £928 million bill in April.

End of business rates relief is billion-pound 'cliff edge' for hospitality

Hospitality businesses across the UK could face their bills quadrupling, totalling tens of thousands of pounds per venue, if business rates relief ends as planned on 31 March.

Kate Nicholls, chief executive of UKHospitality, said allowing the relief scheme to end with no future aid in place would put businesses on a “devastating cliff-edge”.

Local pubs could see a tax increase of £11,000, a town centre restaurant an additional £30,000, and a seaside hotel could be left with an increase of £40,000, UKHospitality has said.

“The scale of this almost billion-pound tax bombshell is just not viable. Many will face risk of closure, be forced to let people go to stay afloat, or shelve their investment plans.

“None of those outcomes are good for the people we employ, the communities we serve, or the economic growth the Government wants to deliver,” Nicholls said.

The trade body is calling on Government to introduce a permanent and universal new lower rate for hospitality businesses in the Budget on 30 October.

Labour committed to replacing the business rates system in its manifesto ahead of the election. Its manifesto statement on business rates pledged to “⁠replace the business rates system, with a new system that will level the playing field between the high street and online giants”.

Nicholls added: “There has to be a solution that avoids this cliff edge, and a lower, permanent and universal multiplier for hospitality would deliver that. Not only would it give certainty and stability to businesses, but it would allow the Government to begin delivering on its own manifesto commitment.”

The hospitality sector generates £140bn annually and supports more than 3.5 million jobs.

Business rates relief was first announced as part of the 2020 Spring Budget, and was implemented due to the major impact of the Covid-19 pandemic on hospitality businesses. Since then, the sector has faced ongoing challenges as a result of the cost-of-living crisis, rising energy costs, staff shortages and inflationary pressures.

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