Hospitality could face £914m business rates bill next April

The business rates bill is set to hit an “eye-watering” £914m next April if no action is taken to offset the increase, UKHospitality has warned.

September’s CPI figures are used as a multiplier that dictates the annual uplift to business rates in England.

The Office for National Statistics (ONS) confirmed today (16 October) that inflation has dropped to 1.7%, which would still account for a £48m increase in business rates for hospitality businesses. 

This £48m will be in addition to the £866m increase the sector expects to see should business rates relief end next year, raising the total bill to £914m.

According to UKHospitality, business rates make up around 5% of business turnover in the sector. Without business rates reform, a large pub or restaurant is estimated to face a £33,500 increase in rates.

Kate Nicholls, chief executive of UKHospitality, said: “These inflation figures confirm that hospitality is set for an eye-watering £914m tax bill in April, if the chancellor doesn’t act at the Budget.

“Business rates must be addressed or venues at the heart of communities will see their rates bills quadruple and find themselves making awful decisions about whether to shorten hours, close more days, lay off staff or even close their doors for good.”

She added: “A lower rate of business rates for hospitality would avoid this dreadful prospect and keep hospitality at the centre of our high streets. Measures in the Budget could be an investment in our high streets, creating new jobs, driving local economic growth and securing the future of the venues that people love.”

The Budget will be on 30 October.