The forthcoming increase in business rates, tied to inflation and scheduled for April 2024, is set to impose an extra financial burden of £234 million on hospitality enterprises, recent findings have unveiled.
When combined with the termination of rates relief, which amounts to £630 million, the hospitality sector is prepared to encounter a substantial business rate expense of £864 million in April, as outlined by UKHospitality.
During the Autumn Budget in 2017, the government made a significant alteration by transitioning the yearly adjustment of business rates, which previously followed the Retail Price Index (RPI), to the more modest headline inflation rate (CPI) observed in September prior to 1st April 2018.
Given that the inflation rate in September currently stands at 6.7%, businesses are now ready to face a significant surge in their business rates costs, totaling a combined rise of £1.95 billion in England next April, as reported by Altus Group, a commercial real estate intelligence company.
UKHospitality is advocating for the Chancellor to implement a freeze on business rates and extend the existing relief measures during the Autumn Statement. This would result in savings of £234 million for hospitality enterprises. Additionally, they are urging for the retention of the 75% business rates relief for the hospitality sector, which would translate into savings of £630 million for the industry.
Kate Nicholls, UKHospitality chief executive, said:
“Today’s figures finally confirm the bleak picture facing hospitality businesses next April. Almost a billion pounds in extra costs from business rates alone is unfathomable – and insurmountable – for many.
Such dramatic cost increases would undoubtedly be the final nail in the coffin for many businesses. It would be particularly perilous for small, independent businesses, for which ongoing relief measures are a lifeline at a challenging time.
Hospitality is at the heart of our communities and it’s essential we do all we can to protect them and the value they bring, from driving economic growth to creating jobs.
It’s imperative that the Chancellor takes clear action at the Autumn Statement to extend the current relief measures for a further year to protect the vital community assets that make up the UK’s vibrant hospitality sector."
UKHospitality is encouraging businesses to correspond with their Members of Parliament, underscoring the urgency for action during the Autumn Statement.