Inflation to drop £864m business rates 'bombshell' on hospitality

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Inflation to drop £864m business rates 'bombshell' on hospitality

Related tags ukhospitality Kate nicholls Government Finance Business rate relief Business rates Inflation

The planned inflation-linked rise in business rates in April will cost hospitality businesses an additional £234m it has been revealed.

With the £630m that the ending of rates relief would simultaneously represent, this combination would leave hospitality facing £864m in business rate costs next April, according to trade body UKHospitality.

At the Autumn Budget in 2017, the Government switched the annual uplifting of business rates for inflation from the Retail Price Index (RPI) to the lower headline rate of inflation (CPI) in the preceding September from 1 April 2018.

With the rate of inflation in September running at 6.7% businesses will see a large increased in business rates costs, which will rise by a total of £1.95bn in England next April, according to commercial real estate intelligence company Altus Group.

UKHospitality is calling for the Chancellor to freeze business rates and extend the current relief package at the Autumn Statement to save hospitality businesses £234m and for it to mintain the business rates relief for hospitality businesses at 75%, saving the sector £630m.

“Today’s figures finally confirm the bleak picture facing hospitality businesses next April. Almost a billion pounds in extra costs from business rates alone is unfathomable – and insurmountable - for many,” says UKHospitality chief executive Kate Nicholls.

“Such dramatic cost increases would undoubtedly be the final nail in the coffin for many businesses. It would be particularly perilous for small, independent businesses, for which ongoing relief measures are a lifeline at a challenging time.

“Hospitality is at the heart of our communities and it’s essential we do all we can to protect them and the value they bring, from driving economic growth to creating jobs.

“It’s imperative that the Chancellor takes clear action at the Autumn Statement to extend the current relief measures for a further year to protect the vital community assets that make up the UK’s vibrant hospitality sector.”

UKHospitality is also urging businesses to write to their MPs to stress the need for action at the Autumn Statement.

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