Hospitality industry calls for urgent action on business rates

By James Bayley

Published: 10 September, 2024

UKHospitality is urging the government to take immediate action to prevent a sharp rise in business rates for thousands of hospitality businesses, warning that bills could skyrocket in April 2025 without intervention.

With the current business rates relief set to expire on 31 March 2024, UKHospitality has called on the Chancellor to address the issue before financially struggling businesses face rate hikes of tens of thousands of pounds. The organisation's Budget submission highlighted the risk, with some businesses, such as pubs, potentially seeing rates increase by as much as £33,000.

Kate Nicholls, chief executive of UKHospitality, warned: “If no action is taken, the hospitality sector will be hit by a business rates bombshell in 2025. The impact on venues already grappling with soaring costs could be devastating. We need the government to step in now before it's too late.”

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The trade body is calling for a permanent, lower business rates multiplier for the hospitality sector, a measure supported by the Hospitality Sector Council. “A universal hospitality multiplier would not only be a lifeline for businesses,” Nicholls added, “it would also deliver on the government’s long-standing promise to overhaul the broken business rates system.”

She also stressed the wider economic impact of inaction. “This isn't just about helping individual businesses. The hospitality sector generates £140bn annually and supports more than 3.5 million jobs. If we’re to unlock the full potential of the industry, we need the government to take these challenges seriously.”

In its Budget submission, UKHospitality urged the government to introduce a range of measures to boost the sector. These include reducing employer National Insurance Contributions, reforming the Apprenticeship Levy, and promoting green investment. “Supporting hospitality means supporting jobs, growth and vibrant local communities. The government must make this a priority,” Nicholls said.

The submission also called for changes to VAT and the commercial planning system to boost growth. “Without reform, businesses will be forced to cut back on investments that could fuel future growth. The government has a clear choice: support a sector with huge potential, or risk pushing it further into crisis,” Nicholls concluded.

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