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Small hospitality venues face a £318m rise in business rates over the next three years, according to analysis from UKHospitality, which says the increases will outweigh more than half of the £634m typically spent each year on Small Business Saturday (6 December).
The organisation said properties with a rateable value below £51k are set for sharp increases in the coming period. It forecasts rises of £38.6m in 2026/27, £110.6m in 2027/28 and £168.5m in 2028/29.
UKHospitality argued that the figures show how recent business rates reforms have unravelled in the week following the Budget. In a letter to MPs, the trade body outlined how the current trajectory was “totally contrary to the government’s manifesto commitment” to level competition between high streets and online operators.
The trade body said ministers had wrongly suggested the Budget delivered a tax reduction for hospitality. It added that, even with a reduced multiplier, bills were expected to increase by 76% for the average pub and 115% for the average hotel over three years. It contrasted this with rises of 16% for distribution warehouses and 4% for large supermarkets.
Among its proposals, UKHospitality is calling for an increase to the sector’s business rates discount to the full 20p permitted in legislation, or for a delay to revaluation levels to keep them at 2023 levels.
Allen Simpson, chief executive of UKH, said: “Hospitality and the high street is being taxed out and all too often the most vulnerable businesses are small businesses. There’s no doubt that we will see business closures, job losses and price increases all accelerate as a result of these changes.
“Every single high street is going to feel a massive hit, and so will our communities when much-loved venues are forced to close as a result of this policy. The government has the power to fix this, and we have presented clear solutions that will allow them to do so.”
He added: “Without intervention, we face business closures, reduced investment and a contraction in youth employment. This scale of increase will force venues to cut jobs, raise prices, and in many cases close entirely.”
