UKHospitality calls for permanent, lower multiplier to avoid high business rates

UKHospitality is calling for a permanent, lower hospitality multiplier to avoid sky-rocketing business rates bills for thousands of hospitality businesses in April 2025.

With current business rates relief set to end on 31 March next year, the chancellor must act to ensure already cash-strapped hospitality businesses aren’t left facing the prospect of their business rates bills increasing by tens of thousands of pounds, UKHospitality said in its Budget submission.

For instance, a pub with a rateable value of £80,000 could see its rates increase by almost £33,000, if relief were to end.

It added that a permanent, lower and universal hospitality multiplier would begin to deliver the government’s manifesto commitment to rebalance the broken business rates system and is backed by the Hospitality Sector Council, made up of experts from across the sector.

In its Budget submission, UKHospitality is asking the chancellor to:

• Deliver its manifesto promise to rebalance the business rates system through a lower, permanent and universal hospitality business rates multiplier.
• Support enhanced back-to-work schemes and reform of the Apprenticeship Levy to help reduce economic inactivity and improve social mobility across hospitality.
• Promote growth by unlocking the commercial planning system, including fast-track planning approvals.
• Reduce employer National Insurance Contributions to support businesses increasing wages.
• Support green investment in the sector by reforming investment credits so they can be offset against employment taxes, rather than corporation taxes.
• Reform VAT for the sector to bring it in line with European rivals, making British tourism competitive, stimulating demand, creating new jobs and allowing businesses to reinvest.

Kate Nicholls, chief executive of UKHospitality, said: “It’s imperative that the Government addresses the looming business rates cliff edge at the upcoming Budget, as the sector’s ability to both survive and thrive depends on it.

“A new, lower multiplier for all hospitality businesses would begin to rebalance a broken system that is weighted against bricks and mortar businesses, and a permanent solution would provide some certainty and stability for businesses that desperately need it. Without action, venues will be placed under yet more strain, giving them no choice but to divert funds that could be spent on investment and growth into paying the bills.”

She added: “While we recognise the financial challenges the new Government faces, it would be frankly irresponsible not to support a sector that generates £140bn in revenue every year and employs more than 3.5 million people.

“This is a sector that has shouldered an enormous amount of cost over the past four years and should be supported to realise its potential to generate significant growth in communities the length and breadth of the UK.”