Writing for Propel, our Chief Executive Kate Nicholls went through our Budget asks and why we'll be campaigning relentlessly for the looming business rates cliff-edge in April to be resolved.
Cliff edge
On 1 April 2025, hospitality businesses across England will be waking up to new business rates bills that could have increased by tens of thousands of pounds.
They could be forgiven for thinking this is a cruel April Fool’s joke, but it’s the very real prospect businesses are facing if relief ends on the 31 March, as is currently the case.
It’s a financial cliff edge that would be catastrophic for businesses up and down the country.
Put simply, if your venue has a rateable value of £40,000, your rates would increase by almost £15,000. A business with a rateable value of £70,000 would see an increase of £30,000 and having a rateable value of £100,000 would see that venue lumped with £40,000 in additional rate bills.
The Government cannot allow that to happen.
That’s why ahead of this Budget, addressing the looming business rates crisis is UKHospitality’s primary focus.
A new solution
We’re calling for a solution that offers stability, certainty, and lower rates bills.
A new lower, permanent and universal multiplier for hospitality businesses will avoid this devastating cliff edge scenario next April, but it will also provide some certainty for businesses who would no longer have to worry about the year-to-year uncertainty of whether relief will be extended.
It will allow businesses to plan for the future and increase their capability to make our villages, high streets and communities, more attractive places in which to live, work and invest.
It’s a solution that has been backed and recommended by the Hospitality Sector Council, a body made up of experts across the sector who worked with Government to come up with answers like this.
For the Government, it would begin to deliver on its manifesto commitment to replace the broken business rates system and level the playing field between the high street and online giants.
If this cannot be delivered, it’s important that reliefs are rolled over and are uncapped.
Find out more about our Budget asks and support our campaign
Budget 2024
Bills quadrupling
Because without a solution, your business will be enormously affected.
The increases businesses would experience are staggering, and that would be on top of five years of financial turmoil that included a pandemic, soaring energy bills, labour shortages, sky-high inflation and a cost-of-living crisis.
Should business rates bills quadruple, then venues will need to divert funds that would otherwise be used for investment and driving growth, into simply paying their bills to stay in business.
A lack of action would be irresponsible, threatening our growth potential and even the survival of many independent and multi-site operators.
Take the brakes off growth
And next April could simultaneously mark another significant increase to the National Minimum and Living Wage, which has already risen by up to 40% for some age bands over the past three years. There must be caution against imposing another excessive increase that goes too far, too fast.
Alongside a lower business rates multiplier for the sector, there needs to be other measures to offset the ongoing cost pressures being placed on businesses.
That’s why we are also continuing to call for reduction in VAT for the sector to bring it in line with our European counterparts, and make British hospitality and tourism more competitive, stimulating demand, creating new jobs and enabling businesses to grow and reinvest.
A reduction in employer National Insurance Contributions that will help businesses cope with increasing wages also remains a key ask.
There is a raft of other things that can be implemented to improve the sector’s fortunes too: reform of the Apprenticeship Levy, a new planning system that includes fast-track approvals and reforming investment credits so they are offset against employment taxes, rather than corporation taxes.
All of these things can help reduce the cost burden on hospitality and, crucially, take the brakes off growth. Because let’s be clear, it’s the growing tax and cost burden that hospitality is bearing that is preventing us from reaching our potential.
As a sector, we are best placed to deliver change, generate economic growth, create new jobs and help regenerate our communities.
Make the case for action
We’ll be making the case for action in everything we do in the next seven weeks leading up to the Budget, but you can play your part in making a difference too.
Business leaders across the sector can get behind our asks in a very simple way – writing to your MP to stress the need for action.
You can do that right here, as well as finding out more about our Budget asks.
Let’s act as a collective voice to bring about positive change for our industry, because without it there will be a very rocky road ahead if those quadrupled business rates bills come to fruition on the 1 April next year.
