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Government Must Act to Address the Unfair Burden of Property Tax on the Hospitality Sector

In the decade before the pandemic, hospitality business rates rose by more than 58%
or £1 billion

Industry body, UKHospitality, says a hospitality tax rate is now one of the changes needed that will be essential to aid recovery. The sector overpaid by £2.4 billion relative to its turnover pre-pandemic.

The call comes as the industry body responded this week to the All Party Parliamentary Beer Group Inquiry on Pubs’ Business Rates and the Government’s Business Rates Review: Technical Consultation.

Among the measures needed to make the system fair for the sector, UKHospitality is proposing:

  • The introduction of a hospitality (or high-street) multiplier for 2023 and an online sales tax to make up the loss of revenue from such a multiplier
  • An urgent investigation into whether the current pub valuation methodology is fit for purpose
  • Better resourced pub valuations that take into account over-trading, the location of a property and historical changes
  • A halt to reforms to the appeals system to ensure businesses, particularly SMEs, have access to reasonable recourse for errors in valuation.
  • A reduction in the administrative burden that Government intends to place on business.

UKHospitality CEO, Kate Nicholls, said: “The hospitality industry has been hit hard by the pandemic and needs further support and reforms in order to be able to fully recover. We need a new business tax rate for high street businesses that recognise the extra cost that hospitality businesses face.

“The current Government proposals around business rate reforms put an ever-higher burden on businesses and will prevent hospitality operators from investing in their businesses, creating jobs and providing services that lie at the heart of their local communities.

“Property taxes in the UK are already nearly double the EU average and as a proportion of turnover hospitality pays four times more than the average sector, this is clearly an unfair burden to place on an industry that has been hit hardest by the pandemic.

“Hospitality is the future of the high street and the reform of business rates will play a key part in this, helping the industry to deliver great places to live, visit and to aid the sector play its full role in driving the UK’s economic recovery.”