UKHospitality has issued a new appeal to the Chancellor, urging for a suspension of business rates. There's concern that a rise in charges could harm investment and push numerous small businesses to a precarious position.
Presently, the plan is for business rates to escalate in April 2024, based on the Government's 'multiplier' linked to September's inflation, gauged by the consumer price index.
Despite a decrease in inflation from 7.9% to 6.8% in July, there are reports that the Treasury anticipates a resurgence in August. This implies that businesses might confront a substantial surge in their rates.
According to an assessment conducted by UKHospitality and disclosed to The Sunday Times, implementing an inflation-linked increase in business rates could potentially result in a £220 million elevation in hospitality expenses for the upcoming year.
This sum would be an additional financial burden alongside the termination of rates relief, amounting to £630 million. As a result, eateries, public houses and coffee shops could be confronted with an extra expenditure of £850 million during the approaching fiscal year.
Kate Nicholls, chief executive of UKHospitality, commented:
"We need to see urgent action from government to avoid this upcoming bill, with firm commitments that there will be no inflationary increase to the total sum of business rates, and that business rates relief will continue for hospitality businesses."
In the previous autumn, Chancellor Jeremy Hunt unveiled a substantial aid package valued at £13.6 billion, designed to assist enterprises that were still recuperating from the repercussions of the pandemic.
This comprehensive package encompassed the suspension of the customary annual rise in business rates, along with an elevation of the discount provided to retail, hospitality, and leisure businesses. This increase saw the discount raised from 50% to 75% for a duration of 12 months, with a maximum limit of £110,000 per individual firm.