500 Large High Street Outlets At Risk Of Closure, Due To Rates Surcharge

UKHospitality and the British Retail Consortium (BRC) have united to call on the Government to exempt hospitality and retail outlets from a planned business rates surcharge, which would see 5,000 high street properties over £500,000 rateable value affected by a higher tax rate.

The trade bodies believe 500 premises would be put at risk of closure, if the surcharge was applied. These properties employ approximately 120,000 people and these jobs would be impacted by any closures.

The Government’s manifesto committed to reforming business rates and levelling the playing field for the high street. This cannot be achieved if hospitality and retail businesses remain eligible for the surcharge and end up with higher rates bills, after decades of overpaying.

Kate Nicholls, Chair of UKHospitality, said: “The broken business rates system has punished bricks and mortar hospitality businesses for decades, with our sector paying three times more than its fair share.

“Reform of the system is long overdue and we now need to see the Government deliver in full its pledge to level the playing field for the high street.

“That means implementing the maximum possible rates discount for properties below £500,000 rateable value, and exempting larger hospitality properties from the surcharge.

“Delivering both those measures is the only way to fulfil that commitment and prevent hospitality businesses from being taxed out.

“The sector was hit by £3.4bn annual cost increases in April, and the threat of this surcharge will only increase this already extortionate figure. Hospitality has the ability to create jobs, support local communities to help them thrive and regenerate our high streets – we need the Government to back us in order to do develop locations where people want to live, work and invest.”

Helen Dickinson, Chief Executive at the British Retail Consortium, said: “Thriving high streets depend on a vibrant mix of outlets – from shops and cafés, to restaurants and entertainment venues. Large retailers are central to this ecosystem, drawing people into town and city centres and boosting footfall for surrounding businesses. They provide significant local investment, as well as around one million jobs for people at all stages of their career.”

“Over the past year, retailers have faced an additional £7 billion in costs – from higher employer National Insurance contributions to new packaging taxes. Introducing a business rates surtax would only add to inflationary pressures, leading to store closures and job losses. We urge the Chancellor to exempt these businesses from the surtax, helping safeguard hundreds of anchor stores and the vital jobs they sustain.”