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UKHospitality (UKH) has welcomed proposals set out in the government’s interim report on business rates reform but warned that only the maximum possible discount on the rates multiplier will provide meaningful support for the sector.
The report includes plans to amend small business rates relief and to address “cliff edges”, where bills rise sharply between bandings. UKHospitality said the changes were a step forward but pressed ministers to go further in the Budget this November.
Legislation passed earlier this year allows the government to apply a discount of up to 20p in the pound, following campaigning by the trade body. UKHospitality wants this applied in full to hospitality properties with a rateable value under £500,000.
Chief executive Kate Nicholls said: “For too long, the broken business rates system has unfairly punished hospitality businesses and I’m pleased that the government is taking action to reform it, following many years of campaigning from UKHospitality. These measures to remove punitive cliff-edges and barriers to investment are positive and will help to rebalance the system, as will the government’s commitment to lower business rates bills for hospitality businesses.”
“Applying the maximum possible discount to the multiplier for all hospitality properties under £500,000 rateable value at the Budget in November is critical. That is the most significant and meaningful benefit that can come from these reforms, particularly with anticipated increases in rateable values coming into effect next April.”
She added: “The maximum discount should be introduced alongside a zero rate for hospitality properties over £500,000 rateable value, to ensure the reform is in keeping with the government’s intention to level the playing field for the entire high street. We are pleased that the government has recognised the harm that large increases in rateable values will cause to hospitality and has committed to transitional relief. This needs to be meaningful and consider the effect of existing cliff edges.
“With hospitality businesses finding themselves taxed out as a result of cost increase after cost increase, lowering business rates, fixing NICs and cutting VAT is the action we need to see the government take at the Budget.”
