Described by industry trade body UKHospitality as a ‘landmark moment’, the Non-Domestic Rating (Multipliers and Private Schools) Act received Royal Assent earlier this month.
It follows the Government’s promise to reform business rates, as set out in Labour’s pre-election manifesto.
“After UKHospitality campaigned for substantial business rates reform for years, legislation making this a reality is a landmark moment,” says Kate Nicholls, chief executive of UKHospitality.
“We’re delighted that the Government is taking action to level the playing field for the hospitality sector.”
The Government has previously said it plans to provide permanently lower business rates for the sector through the introduction of differential multipliers.
Under the proposals, properties with a rateable value below £500,000 could benefit from a multiplier that is 20p in the pound lower than the small business multiplier, according to UKHospitality.
The trade body is asking for this maximum discount to be applied to hospitality properties with a rateable value of less than £500,000.
It is also calling for hospitality properties with a rateable value over £500,000 to be exempt from the surcharge, in line with the Government’s intention to level the playing field for the sector.
“The Government now needs to ensure this is meaningful by offering the maximum discount for hospitality businesses, after decades of paying significantly more than their fair share,” Nicholls continues.
“It should also exempt hospitality businesses from the surcharge.
“A permanently lower level of business rates will truly benefit hospitality businesses and, crucially, rebalance a system that has unfairly overtaxed the high street by billions of pounds.
“Whilst we remain optimistic about business rates reform and its ability to give operators some of the financial respite they desperately need, this unfortunately won’t scratch the surface of the £3.4bn annual cost increases hitting the hospitality sector this month.
“We are urging the Government to work with us to enable hospitality businesses to unlock growth and jobs.”
Full details on the Government’s plan for business rates reform will be unveiled in the autumn.
Hospitality operators saw the level of business rates support it receives slashed from 75% to 40%, capped at £110,000, in last year’s Autumn Budget.