Business taxation could threaten 625,000 hospitality jobs

UKHospitality (UKH) has warned the government that hundreds of thousands of “vital sector jobs” could be lost and investment stunted unless “urgent action” is taken on business taxation.

The ‘Economic Contribution of the UK Hospitality Industry Report’ highlighted best and worst-case scenarios for the hospitality sector and how, if it continues to be overtaxed without government support, 625,000 jobs could be lost over the next five years.

Kate Nicholls, CEO of UKH, said this “sobering news” should serve as a “huge warning sign” for the government, as thousands of hospitality businesses, including hotels, pubs, restaurants, visitor attractions, nightclubs and cafes face a “£113m business rates bombshell” from next April.

She added: “They are increasingly struggling from the effects of a disastrous rates revaluation last year and an archaic tax system that is shutting down the UK’s growth engine and resulting in a bloodbath on our high streets. The threat of losing over half a million UK jobs must surely be reason enough for immediate action.

“We call on the chancellor to announce a freeze on business rates increases in the Budget and introduce a new digital tax to slash the rates burden on hospitality from April 2020.”

Keith Knowles CEO of pan-European hostel operator Beds and Bars, added: “We urgently need root and branch reform of the business rates system. As a group, our total property tax bill increased by £675,000 this year – a rise of 64% – with huge double-digit hikes across UK venues, compared to an average of 2% increases for our European sites.

“This severely restricts our ability to invest and create jobs. This government must decide whether it wants to continue to create the environment for recession or instead build an environment for investment, growth and job creation.”