In a recent post on the UKH website, chief executive Kate Nicholls said it was "imperative" for the Government to address the looming business rates increases on 1 April, which could be a "cliff-edge" for many firms, as part of the upcoming Budget.
Nicholls added the sector’s ability to both "survive and thrive" was dependent on continued Government support with business rates.
The Morning Advertiser (MA) spoke to operators to determine their thoughts on the impact of rising business rates, and understand how they feel trade may be impacted.
Unfair and overpriced
According to UKH, introducing a permanent lower hospitality multiplier, would begin to deliver the Government's manifesto commitment to rebalance the broken business rates system. The trade body estimated a pub with a rateable value of £80,000 could see its rates increase by almost £33,000 if relief were to end.
Speaking on the danger of local Government amending rates, George Greenaway, who runs the Tamworth Tap in Staffordshire said: “The historical perception of the rates system has always been that it is unfair and over priced but with the reduction in the number of businesses in the high street the real danger is that local government could look to offset the shortfall in revenue by increasing the rates for the remaining businesses.”
Greenaway also shared his concerns at the possibility of existing support being eradicated by the new Government, commenting that returning back to original business costs could ultimately see a vast majority of closures throughout the sector.
Regarding Government action going forward, he added: “sticking with the current reduction while a fairer system is explored is paramount and I’d urge the Government to maintain the status quo.”
Managing director of the Three Hills in Bartlow, Cambridgeshire Emma Harrison similarly said: “I have only been in the pub business for seven years but I remain shocked by the level of taxes the pub industry is exposed to.
"We are a massive contributor to both the local and national economy, we provide employment to many, we offer valuable community support and we are the lifeblood of many rural communities.”
Harrison listed Covid 19, increase in energy costs and yearly hikes to the minimum wage as just some of the critical issues trade has faced recently as well as the cost of living crisis. She also addressed the ongoing issue of “constantly having to pivot our businesses to overcome the challenges we have faced over the years”
Urgent reform required
Highlighting the fact the Government has ignored pleas for a level playing field for taxes, Harrison also stated she felt: “taxed to death in terms of business rates.”
Addressing the need to foster a more stable environment for the industry, she continued: “We face a cliff edge in April 2025 when we potentially lose our hospitality discount, and in terms of VAT. It’s time to lower the tax burden on hospitality and to create an environment where we can thrive, not just survive.”
Within its Budget submission, UKH has called on the Chancellor to complete a number of tasks including delivering its manifesto promise to rebalance the business rates system through a lower, permanent and universal hospitality business rates multiplier.
Other requests entail support enhanced back to work schemes as well as reform for the Apprenticeship Levy in order to help reduce economic inactivity and improve social mobility across hospitality.
Heath Ball, who runs three pubs in the south-east – the Red Lion & Sun in Highgate, north London; the Wenlock Arms in Hackney, east London and the Lockhart Tavern in Haywards Heath, West Sussex – also offered opinions on the business rates system.
He said: “Next year’s business rates bill is a real concern for every pub operator across the UK. It is clear the current business rates system requires urgent reform.”
Revealing hopes for business amid an uncertain climate he added: “I often find myself wishing that my establishment could be classified as a restaurant, allowing my rates to be determined by the square footage of the pub rather than turnover.”
Addressing the fact the existing system bases chargeable value on turnover, he emphasised the burden the system places on businesses such as his and addressed growing anxieties for the financial year ahead.
Ball said: “As we approach the next financial year, I am increasingly anxious about the potential consequences if no action is taken to address the business rates issue."
The operator also addressed the issue of having recently exited an energy contract and the reality of being prepared for the harsh effect a significant energy rates bill may have on his business and trade.
