UKHospitality warns cap on business rates relief will jeopardise industry's recovery

24 March 2021 by
UKHospitality warns cap on business rates relief will jeopardise industry's recovery

UKHospitality has warned a cap on the amount of business rates relief which can be claimed by operators in England could jeopardise the future of hospitality venues after they reopen.

The chancellor has extended the 100% rates holiday until June, but businesses will have to pay two-thirds of their bills for the remaining nine months of the financial year.

However, a £2m cap on the relief available to businesses will mean a large proportion of the hospitality industry will be unable to make use of the discount.

UKHospitality estimated this will mean almost 8,000 businesses, employing about 343,000 people, will be paying full rates in July. A further 1,850 sites face the same issue before October.

The £2m cap will typically affect businesses with large sites, multiple venues or those paying high rents in areas such as high streets and city centres.

Both Wales and Scotland have extended the business rates holiday for retail, leisure and hospitality businesses for a further 12 months, raising questions over the policy in England.

UKHospitality is calling on the Treasury to extend the 100% uncapped rates relief for a further three months beyond June, with a 50% discount for the remainder of the year.

"July is simply too early for businesses to be expected to start repaying rates after a devastating year of closure, restrictions and accumulation of debt," said UKHospitality chief executive Kate Nicholls.

"Hospitality stands ready to play its part in creating new jobs and boosting our communities across the country, but this policy risks strangling the recovery in its infancy."

This week the government published an interim report on its review of the business rates system, but gave no indication of any plans for change. A final report setting out priorities for reform will be published in the autumn.

Photo: Shutterstock

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