Business rates plan quickly unravelling, says UKH

Following the Autumn Budget, new analysis from UKHospitality (UKH) shows that the average pub’s business rates will actually increase by 15% next year, amounting to an extra £1,400. 

Even with the reduced multiplier and transitional relief announced by Rachel Reeves at the end of November, UKH says that in 2027/28, an average pub’s rates will be £4,500 higher than today, and in 2028/29 £7,000 higher.

In total, over the three years, an average pub will pay an extra £12,900.

“We repeatedly warned the treasury ahead of the Budget that hospitality would be uniquely impacted by significant increases to rateable values, due to the pandemic impacting previous valuations," says Kate Nicholls, chair of UKHospitality. "This had to be factored into the level of business rates discount it offered the sector."

By 2028/29, an average pub’s business rates will have increased by 76% and an average hotel’s by 115%. 

In comparison, UKH says the rates bill for a distribution warehouse, the likes used by online giants, will have only increased by 16%, an office building will have only increased by 7% and a large supermarket by only 4% by 2028/29.

UKHospitality is calling for the chancellor to urgently increase the level of business rates discount for hospitality properties from 5p to 20p, as previously proposed. 

Broken promises? 

"The government promised in its manifesto that it would level the playing field between the high street and online giants," adds Nicholls. "The plan in the Budget to achieve this is quickly unravelling, and will deliver the exact opposite.

"Our analysis shows that hospitality businesses will be paying more. Pubs will see bills increase by thousands and hotels by tens of thousands. The eye-watering increases pubs, hotels and other venues are now waking up to was exactly the reason why the Treasury had to implement the maximum possible discount. The decision not to do so will lead to higher bills next year.

"The government can solve this issue. I’m certain they did not intend to provide online giants, office blocks and out-of-town supermarkets with a better deal than local pubs, neighbourhood restaurants and coastal hotels.

"We agree with its reforms to deliver permanently lower business rates for hospitality and we appreciate the package of transitional relief, but its current proposal is not delivering lower bills. A 20p discount for hospitality would. We urge the chancellor to revisit."

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