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UKH urges English outlets to prepare for new business rates payments

Published:  01 June, 2021

UK Hospitality (UKH) has urged sector businesses in England to fully prepare for new business rates payments that will kick in from 1 July, with new bills expected to land in the coming weeks.

In March’s Budget the Chancellor announced a full business rates holiday for all hospitality businesses for the first quarter of the financial year (Apr-Jun) and then a 66% discount for the remainder of the year (Jul 21-Mar 22). 

However, a cap on relief available to individual firms means that those businesses with an annual rates bill of over £8m will see their relief capped. 

The cap will typically affect businesses with either very large sites or those companies that have grown to multiple sites, along with businesses in high rental areas such as high streets and city centres.

It is also likely to penalise operators who have previously invested to improve their sites, therefore resulting in higher rates bills under the current system.

“The new rates payments come into effect just days after trading restrictions are due to be lifted and will put a major economic drag on the businesses affected and risk the jobs that they support,” said Kate Nicholls, CEO, UKH.

“Local authorities have the power to offer discretionary discounts or adjusted payment plans to those businesses facing hardship and we urge them to enter into constructive dialogue with those seeking support. 

“This reinforces why it is crucial for the government to deliver on its commitment to dropping Covid restrictions and measures on 21 June. The hospitality sector stands ready to play its part in helping to create jobs and reinvigorate local communities, but that will only be possible if our businesses return to viability at the earliest opportunity,” she said.

UKH is proposing that affected businesses maximise their cap at the earliest opportunity by contacting their local authority and, for example, proposing that that relief is received in the early months of bills being paid.

In turn, UKH said, this would reduce the administrative burden and allow businesses to receive early benefit. 

Those businesses that will struggle to pay any rates from 1 July are also urged to get in touch with their local authority at the earliest opportunity to discuss payment plans.

Councillor Sharon Taylor, chair of the Local Government Association’s Resources Board, said: “Councils know that retail, leisure and hospitality businesses have been hugely impacted by the pandemic. They remain ready to continue to support businesses as we come through this crisis and would urge them to contact them with any queries over their business rates bills.”

At the beginning of last month, UKH warned that over 330,000 hospitality jobs are at risk if rent protections are removed this summer, with £2.5bn in rent debt hanging around the neck of the industry. 

Separately, on Friday UKH released research last Friday that revealed the extent of the staffing crisis facing the sector.

Based on a survey of hundreds of hospitality operators, the analysis showed that the shortage of front-of-house staff and chefs is particularly acute, with 80% of those surveyed reporting vacancies for front-of-house roles, such as waiting and bar staff, and 85% in need of chefs.