UK- The main trade body for the UK’s hospitality sector, UKHospitality, has warned the industry is headed towards a financial crisis with a potential £928million (US$1.2billion) rise in business rates from April 2025 if the current relief scheme is not extended.
The current relief scheme ends on March 31, 2025. If the scheme is not extended, businesses could face quadrupling bills.
Many venues could face closure and mass layoffs if the relief scheme is not extended.
According to the trade body, local pubs will be hit with a rate increase of £11,000 (US$14,400). If the relief scheme is not extended, town center restaurants will also be required to pay an additional £30,000 (US$39,400) in rates.
Seaside hotels will be required to pay an additional £40,000 (US$52,500) in rates if the relief scheme is not extended.
If the relief system is not extended, it will lead to a £928million (US$1.2billion) increase in business rates for the hospitality sector.
UKHospitality has criticized the current business rates system, describing it as unfair for the sector. The trade body argues businesses are paying three times more than they should.
The body recommends a lower, permanent and universal rate or a fairer multiplier for the sector. It has called on the Chancellor to recommend these new rates at the budget reading on October 30.
Kate Nicholls, chief executive of UKHospitality, said, “Hospitality businesses are facing a devastating cliff edge next April when many will see their bills quadruple.”
“The scale of this almost billion-pound tax bombshell is just not viable. Many will face the risk of closure, be forced to let people go to stay afloat or shelve their investment plans.”
Many operators in the sector have warned of the detrimental effects of the government not responding to the body’s calls for reform of the current business rates system.
Nicholls warned that the current relief system has enabled many operators to continue trading, employ staff, and pay taxes. If the current system is not addressed, many businesses will face financial distress, especially those that still have COVID-19 loans to pay.
The financial danger posed by the current system is exacerbated by the fact that most hospitality businesses have struggled with a drop in demand and cost pressures.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE
