Struggling businesses including pubs, bars & restaurants will see their business rates halved next year, the government has confirmed.
Discounts for small businesses are expected to increase from 33% to 50%, with around half a million shops, restaurants and pubs being the main beneficiaries.
The tax break, which applies to all businesses with a rateable value below £51,000 and will come into effect in April, 2020 providing savings of up to £12,500. The 50% discount, the government has announced as part of the Queens’ speech
It is estimated that nine out of 10 independent businesses will qualify for the relief, and for the first time, independent cinemas and music venues will also qualify, in a bid to safeguard local entertainment.
A budget in March will announce a review of the whole rates regime, Chancellor Sajid Javid said: “We want to reinvigorate communities up and down our great country, helping people put the heart back into the places they call home. That’s why we’re taking action to save our high streets and keep pubs, cafes and hairdressers open by slashing their business rate bills by a half.”
Welcoming the announcement UKHospitality Chief Executive Kate Nicholls said: “Improving the business rates system is paramount and the Government commitment to a review is very welcome. Rates have arguably been the single biggest barrier to growth for hospitality and a shake-up of the whole business tax system is overdue. UKHospitality has been pushing for a review vocally and persistently for years so it is great to see the Government listening to our message.
“Additional support for pubs, which have been hit so hard by rates in recent years is a great first step. This support does need to apply to the whole of hospitality, though, and we will continue to push the Government to ensure that the business tax system is fit for purpose in the 21st Century.
“The Government’s agenda is clearly built around supporting businesses. This is very welcome, not least because we know that hospitality is a vehicle by which regeneration and economic prosperity can be delivered to the UK’s high streets, seaside towns and cities across the UK.”
“We are also pleased to see the Government move towards an immigration policy which supports the economy and businesses. A fair and managed, three-tier system at all salary and skilled levels, hand-in-hand with investment in skills and training, is a must. This will avoid exacerbating labour shortages, keep the economy at full strength and allow hospitality to continue its work boosting the domestic workforce. An immigration system which is evidence-led and values skills at all levels is essential for hospitality and the wider economy.”
Mike Clist, British Institute of Innkeeping CEO commented: “We are delighted that the new Government has recognised the importance of supporting high street businesses, and in particular those in hospitality who provide so much help to their local communities.
Our members do more than just sell goods and services – they are a haven for the lonely and provide employment and a fantastic career opportunity for so many local people. They deserve the financial support that this announcement gives, to ensure that they can continue to be the vital hubs of the community that they are.”