A parliamentary report into business rates calling for action to help the hospitality industry has been welcomed.
The report by the All Party Parliamentary Group for Hospitality will be submitted as evidence to review being undertaken by the Treasury Committee into business rates.
The reports states that the current system discriminates against the sector, which overpays by £2b a year, in relation to its turnover. The 2017 revaluation hit hospitality hard with the industry seeing increases of more than 50%, compared to an country-wide average of 9.6%. The problem has been exacerbated by delays with the new check, challenge, appeal system, which can take years and could “quite literally lead to business failure”.
The report has put forward a number of measures that could relieve the pressure on business and help make the system fit for purpose.
• A Royal Commission being set up to identify systemic reforms to the current system and determine how to reduce the burden of taxation for the hospitality sector
• A review of business rates taking into account the importance that hospitality businesses have within their communities
• A business rates ‘pause’ following investment in a property
• The beefing up of the Digital Services Tax, proceeds of which could provide relief to sectors like hospitality, which should also be supported by a 2% tax on digital goods
• Greater consideration to the current system of valuations, including frequency and methodology - an approach used in the Netherlands
• More funding for the appeals
Kate Nicholls, CEO of UKHospitality and secretariat of the All Party Parliamentary Group for Hospitality, said: “We welcome this important report as for too long, business rates have failed to reflect the realities of business in the 21st century and high streets have been hit hard. It has become clear that business rates are a major contributor to the distress being felt on Britain’s high streets and action is needed to ensure these can return to being thriving community hubs.
“The current business rates regime clearly discriminates against the hospitality sector, which overpays by over £2b per year, relative to its turnover. There is now cross-party commitment for reform of the system, as outlined in party manifestos. The government in Westminster and the devolved authorities need to give us the reform that was promised.”
Steve Double MP, chair of the All Party Parliamentary Group for Hospitality, added: “The health of the high street is a cross-party concern and for too long the issue of business rates reform has been ignored. The hospitality sector is incredibly important to the UK’s economy; it accounts for £39b each year in total tax receipts and is the third largest employer, providing jobs for over 3.2 million people across every region of the country. Given this, it’s vital that the needs of the sector are properly addressed.”