Rising costs erase business rates relief, says UKHospitality

The cost and tax increases announced in yesterday’s budget are putting increased pressure on the hospitality industry, UKHospitality has warned.

Wage rises, holiday taxes and steep increases in rateable values are ‘wiping out’ the 5p business rates discount for hospitality.

New rateable values used to determine bills, published after the Budget, said accommodation businesses are seeing rateable values increase 76%, pubs by 30% and restaurants and cafés by 14%.

Meanwhile, the steep increase in wages will reduce job opportunities, especially for young people, with the trade body saying the changes would cost the hospitality industry an extra £1.4b.

UKHospitality said hospitality has, again, been disproportionately hit, risking the creation of a two-tier economy.

Kate Nicholls, chair of UKHospitality, said: “A 5p business rates discount is simply not enough to offset these costs and redress the damage it will do to business viability and job opportunities.

“This is exactly why we called for the government to use the maximum possible discount it had the power to implement, which could have genuinely delivered lower business rates.

Read more about how the industry is reacting to the Budget

“Instead, we have a situation where hospitality businesses are checking their wage bills and rateable values, and their hearts are sinking at the eye-watering increases before them.”

She added: “Once again, the government is trying to balance the books disproportionately on the backs of the high street – and risks creating a two-tier economy.

“Our tax burden remains the highest in the economy and we need urgent action to reduce the cost of doing business. The only way to cut the cost of living is to reduce the cost of doing business, and this Budget does the opposite.”

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