The UK hospitality industry is on the brink of a financial crisis with a potential £928m ($1. 2bn) increase in business rates if the current relief scheme is not extended beyond 31 March 2025.
Trade body UKHospitality has raised concerns that without an extension, many venues could face closure due to significant hikes in their bills.
UKHospitality has highlighted the dire consequences for local pubs, town centre restaurants and seaside hotels if the relief scheme ends as planned.
A local pub could face a rise of £11,000, a town centre restaurant an additional £30,000 and a seaside hotel an increase of £40,000.
The trade body is urging Labour to fulfil its manifesto commitment to reform the business rates system, a promise made ahead of the July 2024 General Election to balance the tax burden between high street venues and online businesses.
The absence of any mention of business rates reform in the King's Speech in July has prompted UKHospitality to call on the government to introduce a lower, permanent and universal rate for the hospitality sector.
UKHospitality chief executive Kate Nicholls stated: “Hospitality businesses are facing a devastating cliff-edge next April, when many will see their bills quadruple. The scale of this almost billion-pound tax bombshell is just not viable. Many will face the risk of closure, be forced to let people go to stay afloat, or shelve their investment plans.”
Tim Hassell, who operates the Thurlestone Hotel in Devon, shared his concerns, noting that an end to relief in April 2025 would require him to find an additional £110,000.
“In a year when we have seen a drop in demand and extra costs on almost everything, we have seen profits drop to a break-even point. A huge rise in our business rates bill would have a massive impact, particularly on our investment plans." Hassell also highlighted the need for reform of the current system which he believes unfairly penalises property-based businesses.
Echoing the sentiment, Roxane Marjoram, co-owner of several pubs in and around Suffolk, expressed her anxiety about the potential quadrupling of rates bills and underlined the role of the hospitality sector in the nation's economic revival. “Even though we’re operating in an environment with significantly higher costs post-Covid, pubs and restaurants like ours can and will play a strong part in economic recovery going forward, if we’re supported with fair rates bills."
