Uk Hospitality Sector Faces £914m Increase in Business Rates

The U.K. September inflation figures suggest that business rates in England will increase by an additional £48m next year, as per the Office for National Statistics' confirmed inflation rate of 1.7%. This increase will specifically affect hospitality businesses, adding to their financial burden.

This £48m is on top of an already projected £866m increase in business rates for the sector, assuming the existing relief ends next year. Consequently, the total additional cost for the industry in April is estimated to be £914m.

Business rates currently constitute about 5% of hospitality sector turnover. Without any intervention, this percentage could increase significantly, leading to potential hikes in rates of around £33,500 for large pubs or restaurants.

The trade body UKHospitality is urging the Chancellor to introduce a lower, permanent, and universal multiplier for hospitality to avoid such steep increases.

Kate Nicholls, Chief Executive of UKHospitality, warns of potentially severe implications if the issue of business rates is not addressed. According to Nicholls, the hefty increase could force businesses to reduce operating hours, lay off staff, or even shut down permanently. She advocates for lower business rates for the hospitality sector to maintain its central economic role. She also suggests that measures in the Budget could be considered an investment in high streets, potentially creating new jobs, driving local economic growth, and securing the future of famous venues.