UKHospitality urges sector to prepare for new business rates payments

The business rates holiday, which was lobbied for intensively by the trade body, to allow greater time for operators to recover following a period of limited reopening and ongoing restrictions is coming to an end in June.

All ratepaying hospitality businesses will see bills begin landing next month, with demands for payment at a time when they are still trying to recover from the impact of the pandemic.

“The new rates payments come into effect just days after trading restrictions are due to be lifted and will put a major economic drag on the businesses affected and risk the jobs that they support," says Kate Nicholls, UKHospitality chief executive.

Chancellor Rishi Sunak announced in March’s Budget​ a full business rates holiday for all hospitality businesses for the first quarter of the financial year (Apr-Jun) and then a 66% discount for the remainder of the year (Jul 21-Mar 22).

However, a cap on relief available to individual firms means that those businesses with an annual rates bill of over £8m will see their relief capped.

The cap will typically affect businesses with either very large sites or those companies that have grown to multiple sites, along with businesses in high rental areas such as high streets and city centres. It is also likely to penalise operators who have previously invested to improve their sites, therefore resulting in higher rates bills under the current system.

UKHospitality is proposing that affected businesses maximise their cap at the earliest opportunity by contacting their local authority and, for example, proposing that that relief is received in the early months of bills being paid. In turn, this will reduce the administrative burden and allow businesses to receive early benefit.

Those businesses that will struggle to pay any rates from 1 July are also urged to get in touch with their local authority at the earliest opportunity to discuss payment plans.

"Local authorities have the power to offer discretionary discounts or adjusted payment plans to those businesses facing hardship and we urge them to enter into constructive dialogue with those seeking support," adds Nicholls.

“This reinforces why it is crucial for the Government to deliver on its commitment to dropping Covid restrictions and measures on 21 June.

"The hospitality sector stands ready to play its part in helping to create jobs and reinvigorate local communities, but that will only be possible if our businesses return to viability at the earliest opportunity.”