Hospitality calls for business rates support amid 'endless cost rises'

Hospitality venues will be forced to cut staff levels and roll back investment if they do not receive help with business rates bills next year, a new survey has found.

A joint study by hospitality trade bodies said 38% of operators would fail to make a profit without further support.

The British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII), Hospitality Ulster and UKHospitality have been building pressure on the Chancellor to extend hospitality sector relief and freeze the multiplier in the Autumn Statement on 22 November.

Eligible hospitality, leisure and retail businesses get a 75% discount off their business rates bills for the 2023/2024 tax year up to a cap of £110,00 per business.

Chancellor Jeremy Hunt announced the scheme during his 2022 autumn statement, but it is set to end on 31 March 2024.

Business rates are also set to rise next April in line with September's headline rate of inflation, which Altus Group warned could also add more than 6% to bills next year.

A joint spokesperson for the trade bodies said: “Reducing investment and cutting staffing levels are the last thing venues want to do. In fact, they want to do the opposite, but their hands will be tied if rates increase to such an extent in April.

“Businesses are only able to absorb endless cost rises for so long and yet more pressure in the form of business rates will only force them to consider whether this is passed onto consumers.

The survey also found there has been an 18% rise in hospitality businesses noticing consumers purchasing fewer drinks when they go out, with 72% of respondents reporting the number of drinks purchased having decreased slightly (55%) or significantly (17%).

More than half (55%) of operators said they had not raised menu prices by as much as their own cost increases.

The trade bodies said: “These businesses are at the heart of communities and high streets across the country, employing millions, generating economic growth and driving investment across our cities, towns and villages.

“Our economy cannot grow if hospitality cannot grow. The Government must act immediately to underpin this growth and ensure our pubs and hospitality venues survive.”

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