Consultation into late-night levy charges launched by Home Office

A consultation into late-night levy charges has been launched by the Home Office, ahead of changes aimed at increasing its use by local authorities.

Two proposals for determining the rates businesses would pay under the levy have been put forward within the consultation document, despite trade bodies calling for the tax to be abolished.

The first proposal would base charges on the current licence fee system for venues selling alcohol, with no option for licensing authorities to apply a discount.

The second would use the same model, but allow for a discretionary 30% discount for venues qualifying for Small Business Rate Relief.

Only nine local authorities were implementing a late-night levy in 2022 with several councils having scrapped the tax in support of the hospitality industry.

In September 2022 Nottingham City Council revoked the charge and said it was placing a "difficult burden" on businesses and "could be a barrier" to new or expanding firms.

However changes introduced through the Policing and Crime Act 2017, but not yet in force, are intended to increase its use. They will give local police and crime commissioners the right to request a levy is introduced to support the management of the night-time economy and require local authorities to publish information about how revenue is used. The implementation of the change had been delayed to allow for the consultation to take place.

UKHospitality chief executive Kate Nicholls said: “The ineffective and costly late night levy continues to stifle the recovery of the night-time economy, which was among the hardest hit by the pandemic.

“Now is not the time to extend the levy and the economic harm it inflicts on our late-night venues, taking £365,000 from the industry last year. Instead, the levy should be abolished in order to free up much-needed cash for businesses to invest in their business or, in many cases, simply stay afloat.

“Some cities across the UK have reached that conclusion themselves, taking the decision to remove the levy, and the House of Lords Committee are of the same view; concluding the levy had failed to achieve its objectives and should be abolished.

“The night-time economy is part of the fabric of towns and cities across the country, attracting thousands of visitors and raising millions for the economy. I’d urge the government to remove the levy as soon as possible to allow the night-time economy to flourish, recognising all the benefits it brings to local areas.”

The consultation will close on 4 April 2023 and can be viewed here.

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