As things currently stand, business rates are set to increase next April under the Government’s ‘multiplier’, which is pegged to inflation in September, as measured by the consumer price index. And while inflation fell in July from 7.9% to 6.8%, the Treasury is reportedly braced for it to rebound again in August, meaning firms could face a steep increase in their rates.
An analysis by UKHospitality, shared with The Sunday Times, suggests that increasing business rates by inflation could see hospitality bills rise by £220m next year.
This would come on top of an additional £630m cost from rates relief ending, leaving restaurants, pubs and cafés facing an additional bill of £850m in the new financial year.
Kate Nicholls, chief executive of UKHospitality, told The Sunday Times: “We need to see urgent action from government to avoid this upcoming bill, with firm commitments that there will be no inflationary increase to the total sum of business rates, and that business rates relief will continue for hospitality businesses.”
Last autumn, Chancellor Jeremy Hunt announced a major support package worth £13.6bn to help businesses still recovering from the pandemic.
It included freezing business rates, which usually increase annually, as well as increasing the discount for retail hospitality and leisure businesses from 50% to 75% for 12 months, capped at £110,000 per firm.
