Government Set to Revise Business Rates Policy Following Hospitality Industry Pressure
The Government is preparing to adjust its business rates policy for the hospitality sector following significant pushback from pub operators and industry representatives, CLHNEWS has learned.
According to a government source, revisions to the business rates structure are expected to be unveiled shortly, aimed at addressing concerns about the methodology used in calculating these charges.
The modifications will form part of a broader Treasury initiative that also encompasses support for licensed premises regarding regulatory matters, trading hours, and bureaucratic streamlining.
The hospitality sector has been vocal in its campaign for government intervention, with multiple operators expressing concerns about the financial viability of their businesses under the proposed framework. Parliamentary representatives from various constituencies where licensed premises operate have also raised the issue with senior government figures.
Last November’s Budget outlined £4.3 billion in financial assistance for retail and hospitality businesses over a three-year period. However, the same fiscal announcement also confirmed the withdrawal of business rates relief measures that had been implemented during the pandemic period.
The sector faces additional financial pressure from updated property valuations, which determine business rates liability.
Multiplier Discount
These revaluations have resulted in increased taxable values for many licensed premises and restaurants, reflecting a shift from the lower valuations recorded during the pandemic when trading conditions were severely restricted.
Industry stakeholders have emphasised that the combination of relief withdrawal and revaluation has created significant cost increases for operators already managing substantial overhead challenges.
Kate Nicholls, Chair of UKHospitality, said:
“The entire hospitality sector is affected by these business rates hikes – from pubs and hotels to restaurants and cafes.
“We need a hospitality-wide solution, which is why the Government should implement the maximum possible 20p discount to the multiplier for all hospitality properties.”
“Cry of the Pub”
John Webber Head of Business Rates at Colliers said,
“We are pleased to hear the Treasury is reported to be backtracking and is taking on board the cry from the pub sector about how punitive business rates rises are going to be when the new list comes into force next April. Based on massive increases in rateable value and a smaller multiplier-that was just not small enough, the current policy would lead to some pubs facing over 100% rises in their business rates bills over the next three years. This would do nothing to halt the rate of closure of pubs we are seeing across the country.
“However, it beggars’ belief that the government did not think about the consequences of its policies when it introduced them, when it set the multiplier levels and when it totally removed RHL (retail hospitality & leisure) from the sector. A proper impact study should have been carried out then.
“And if the government acknowledges business rates are too high for the pub sector, what about all the other sectors seeing steep rises- such as independent retailers, restaurants, hoteliers, and offices and industrial occupiers too? Rather than bringing in fundamental reform, the government used its Budget to inflict a 10.2% increase on business rates bills on UK plc next April, increasing the tax take from £33.6 billion to £37.1 billion. This is unsustainable given all the other costs UK businesses are facing