A treasury minister was told that the hospitality sector had made a business rates overpayment of £1.8b, during a debate held in Westminster Hall this week.
Labour's MP for York Central, Rachael Maskell, had called a debate on business rates, which was held in front of the financial secretary to the treasury Mel Stride.
Introducing the debate Maskell said: "It's almost every day now that we learn of a chain of retail stores or a local business closing their doors resulting in the loss of jobs, people's lives being thrown into turmoil and empty premises along our high streets."
She added: "The hospitality sector employs 2.9 million people across the UK and while they pay 10% of all business rates their turnover is just 3%. As they put it they've made an over-payment of £1.8b."
Maskell told the treasury minister that "urgent action" was needed, adding that business leaders wanted to know "why the government is providing sticking plasters when major surgery is required".
She quoted figures that while £30b was raised through the tax, £9b of that was paid back through relief, describing the figures as a sign of "how broken the system is".
The York MP told The Caterer that her colleagues had emphasised that issues with business rates extended across the country, but she said the minister was "noncommittal, despite it being a manifesto pledge".
Speaking in the debate Stride said: "Let me point out the numerous things that the Government have done on business rates to support businesses. In 2016, we announced around £9b of relief on business rates. We made the 100% small business relief permanent, which took 600,000 businesses out of rates altogether. We increased the threshold for the standard multiplier, removing 250,000 businesses from the higher rate of business rates. Of course, we were able to do that only because of our prudent stewardship of the economy, which has allowed us the space to provide that relief to the business community."
Maskell, who has met with UKHospitality said she and colleagues would continue to press the government for action.