UK – British finance minister Rachel Reeves on October 30 announced 40% relief for eligible retail, hospitality, and leisure businesses, up to a cap of £110,000 (US$143,000) per business.
Shops, cafes, and pubs in England have received relief from the previously expected increase in business rates for the upcoming year. This extended relief scheme was originally implemented during the COVID-19 pandemic.
Trade organizations UKHospitality and the British Retail Consortium reported that high street businesses contribute over one-third of the annual business rates, totaling nearly £9 billion (US$11.7 billion). This figure is significantly higher than the sector’s 9% share of the overall economy.
Potential tax measures may involve a “stealth” freeze on income tax thresholds, which could generate revenue without altering headline rates. Employers may also limit pay raises due to anticipated increases in national insurance contributions.
Hospitality players have long argued that business rates—a property tax levied on most commercial properties to fund local services—are outdated and provide an unfair advantage to online retailers like Amazon.
This announcement follows a joint statement from the British Beer and Pub Association, the British Institute of Innkeeping, and UKHospitality, urging the government to make the COVID-era rates relief for the hospitality sector permanent.
The current relief is set to end on April 1, 2025, coinciding with anticipated tax increases.
Pubs and restaurants have expressed concerns about potential closures and a difficult Christmas season if Rachel Reeves’s upcoming budget results in higher taxes and the termination of COVID-related business rate relief.
Initially introduced in 2020 to support hospitality venues during mandated closures, this relief has provided significant financial assistance.
Jeremy Hunt, Reeves’s Conservative predecessor, last extended this relief in November, which currently offers a 75% discount on business rates, capped at £110,000 (US$142,672), until April 1, 2025.
A recent survey by NielsenIQ revealed alarming trends: 54% of respondents indicated they would reduce their workforce, and 51% would postpone planned investments if full business rates were reinstated.
Additionally, over a quarter of the businesses surveyed stated they would consider closing at least one location if their rates reverted to pre-pandemic levels.
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