UKHospitality: ‘Businesses face devastating cliff-edge without further rates support’

According to the trade body, a local pub could see an increase of £11,000 in its rates bill if the current 75% discount, worth up to £110,000, for hospitality businesses ends as planned on 31 March 2025.

A town centre restaurant faces an additional £30,000 payment, and a seaside hotel could be left with an increase of £40,000.

“Hospitality businesses are facing a devastating cliff-edge next April, when many will see their bills quadruple,” says Kate Nicholls, chief executive of UKHospitality.

“The scale of this almost billion-pound tax bombshell is just not viable. Many will face risk of closure, be forced to let people go to stay afloat, or shelve their investment plans.

“None of those outcomes are good for the people we employ, the communities we serve, or the economic growth the Government wants to deliver.”

UKHospitality is calling on Chancellor Rachel Reeves to use her first Budget since Labour’s general election victory in the summer to introduce a new lower, permanent and universal rate or ‘multiplier’ for hospitality’s business rates.

Labour committed to replacing the business rates system and level the playing field between the high street and online giants in its manifesto​​, although there was no subsequent mention of it in July’s King’s Speech​​.

“There has to be a solution that avoids this cliff edge, and a lower, permanent and universal multiplier for hospitality would deliver that,” Nicholls continues.

“Not only would it give certainty and stability to businesses, but it would allow the Government to begin delivering on its own manifesto commitment.

“The dangers of not acting are stark – whether you’re a pub, coastal hotel or soft play centre for kids and families.

“At the Budget, the Chancellor can choose to act and take the brakes off the sector’s growth by avoiding this cliff-edge. I hope she does just that because inaction could be fatal for many businesses.”