Hotelier makes tax burden plea as he announces closure of the Fleece in Richmond

“Unrelenting, chronic staffing issues and ever-increasing costs” have been blamed for the closure of the Grade II-listed Fleece hotel in Richmond, north Yorkshire.

Chris Miles, co-owner of the 13-room hotel, which includes a 42-cover restaurant and 30-seat café-bar, made an impassioned plea for the tax burden on the hospitality industry to be reduced as he announced the business would close completely from the end of August.

He said: “While I do not want to appear bitter (although I am a little to be honest!), it is imperative that our government take action to provide much needed support to businesses like the Fleece.

“We do not need a handout, but we must be able to keep more of the money we generate. Since opening in May 2019, in addition to the increasing costs we have had to contend with, the Fleece has paid [some] £350,000 to HMRC in VAT and a further £100,000 in employer National Insurance and business rates. That figure would have been higher had it not been for the temporary VAT reduction in 2020-2022.

“It is an enormous burden for a fifth of our income to be taken in VAT in addition to the other taxes we pay before any profit is made. We simply do not have the luxury of passing the 20% VAT cost onto our customers and this decimates our profit margins. We need our government to recognise this and to help us. We don’t want handouts, but we do need to be able to make profits.”

Miles said the hotel had not “gone bust”, but was closing “on our terms and in an orderly way”, with all employees, suppliers and other creditors paid.

The bar and restaurant held their last services on Sunday 30 July, but the hotel will continue to operate as a bed and breakfast to honour room bookings through August.

The hotel had undergone a £3m renovation, which included the creation of six residential properties within its footprint, before reopening in 2018.