UKHospitality: Venues will close without business rates reform

The hospitality industry could be hit with a nearly £1b bill if business rates relief is not extended beyond next April, UKHospitality has warned.

The trade body said many venues would be forced to close due to their bills rising tens of thousands of pounds if the relief scheme ends as planned on 31 March.

A local pub could see an 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 said.

It has called on Labour to honour its manifesto pledge of reforming the business rates system in the upcoming Autumn Statement on 30 October.

Ahead of the election, Labour had promised to “level the playing field” between high street venues and online giants by reforming the tax. However, there was no mention of the plans in the King’s Speech in July.

Tim Hassell, who runs the Thurlestone hotel in Devon, would have to find £110,000 if relief ended in April.

He said: “In a year when we have seen a drop in demand and extra costs on almost everything, we have seen profits drop to break-even point. A huge rise in our business rates bill would have a massive impact, particularly on our investment plans.

“The current business rates system unfairly penalises property-based businesses like ours. It’s in dire need of reform.”

Roxane Marjoram, who co-owns several pubs in and around Suffolk with husband David, said the potential quadrupling of rates bills filled her “with dread”.

She added: “Even though we’re operating in an environment with significantly higher costs post-Covid, pubs and restaurants like ours can and will play a strong part in economic recovery going forward, if we’re supported with fair rates bills.”

UKHospitality is calling on the government to introduce a lower, permanent and universal rate, or ‘multiplier’, for the hospitality industry.

Kate Nicholls, chief executive of UKHospitality, said: “Hospitality businesses are facing a devastating cliff-edge next April, when many will see their bills quadruple.

“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.”

The Treasury has been contacted for comment.

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