Business rates rise could put 500 UK outlets at risk of closure, warns UKH
Hundreds of the UK’s hospitality and retail outlets could be forced to close if the Government goes ahead with plans for a new business rates surcharge, according to industry groups UKHospitality (UKH) and the British Retail Consortium (BRC). UKH chair Kate Nicholls said the “broken” system had “punished bricks and mortar hospitality businesses for decades.”
The trade bodies, UKH and BRC, are calling for reform of the business rates system, and have warned that around 500 hospitality and retail premises could shut their doors, putting 120,000 jobs at risk, if the Government implements the new surcharge.
The surcharge, which would apply to commercial properties with a rateable value of more than £500,000, is expected to affect around 5,000 large outlets across the UK.
The two trade bodies have called on the government to exempt hospitality and retail businesses from the measure, arguing it contradicts promises to reform the system and support the high street.
Kate Nicholls, chair of UKHospitality, said: “The broken business rates system has punished bricks and mortar hospitality businesses for decades, with our sector paying three times more than its fair share.”
Reform ‘long overdue’
She said reform of the system is “long overdue” and the Government now needed deliver in full its pledge to level the playing field for the high street.
“That means implementing the maximum possible rates discount for properties below £500,000 rateable value, and exempting larger hospitality properties from the surcharge.”
Nicholls said that delivering both those measures is the only way to fulfil that commitment and prevent hospitality businesses from being taxed out.
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She added: “The sector was hit by £3.4bn annual cost increases in April, and the threat of this surcharge will only increase this already extortionate figure.
“Hospitality has the ability to create jobs, support local communities to help them thrive and regenerate our high streets – we need the Government to back us in order to develop locations where people want to live, work and invest.”
Job loss warning
The BRC’s CEO, Helen Dickinson, said the policy risked “inflationary pressures” and “job losses” across towns and cities.
Dickinson said retailers were already dealing with an additional £7bn in costs over the past year from higher National Insurance contributions and new packaging taxes.
The Government’s manifesto committed to reforming business rates and “levelling the playing field” for high street businesses.
Plea to Government
UKH and the BRC said that goal would be undermined if large outlets were subjected to higher rates bills after what they described as “decades of overpaying.”
Dickinson added: “Over the past year, retailers have faced an additional £7 billion in costs – from higher employer National Insurance contributions to new packaging taxes. Introducing a business rates surtax would only add to inflationary pressures, leading to store closures and job losses.
“We urge the Chancellor to exempt these businesses from the surtax, helping safeguard hundreds of anchor stores and the vital jobs they sustain.”
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