Robin Rowland: "Restaurant business rates akin to the window tax"

Robin Rowland, European operating partner at private equity firm TriSpan, told the UKHospitality conference in London this week that the increase was “archaic”.

He said it was unfair that online retailers were able to avoid the rates hitting the high street.

“It's not where we spend our money, the people that should be taxed are clearly people that take money on digital devices,” said Rowland, who is still a director at YO! Sushi alongside Marston’s and Café Nero.

"The rates are probably equivalent to the window tax in Dickensian times. It’s that relevant to revenue today." 

He added that the restaurant industry had suffered from “overcapacity”, with “too many” restaurants opening in single developments around the country.

“At Marston’s we shed 500 out of 2000 pubs, most of them have not come back in to service which is great because it means pubs and bars are in reasonably rude health,” said Rowland.

He added that the same thing needed to happen with restaurants.

Speaking on the same panel,​​ serial industry investor Luke Johnson – partner at private equity firm Risk Capital Partners  - agreed the hospitality sector was “overburdened” with tax.

“I feel it’s disproportionate,” said Johnson. “In other countries there are discounts on VAT for hospitality businesses to compensate, which might be one way around it. [But] the £27bn a year that is collected from business rates is so important to the government’s finances that they’re going to give that up very reluctantly.”

Business rates rose in April 2017 in a bid to align them more closely with current property values.

According to Colliers International this amounted to a 28% rise in bills​​ at the Jamie Oliver Restaurant Group, 40% at Byron and 23% at Prezzo in 2017.

All three groups have closed restaurants through Company Voluntary Agreements (CVA) this year.