Welsh hospitality sector faces £122m business rates increase

Welsh hospitality businesses face a £122m increase in business rates over the next three years following the latest Welsh Budget (20 January), according to analysis by UKHospitality Cymru. 

The trade body has warned that the sector’s tax bill will rise by 63% during this period, and believes that this increase will accelerate the decline of high streets. 

The rise is driven by the removal of current relief and the exclusion of hospitality from wider reform. An average 23% increase in rateable values has further compounded the costs.

Annual bills are expected to rise by £29.4m next year. Costs will then increase by £40.1m in 2027/28 and £52.6m in 2028/29.

David Chapman, executive director of UKH Cymru, said: “This Budget is disastrous for Welsh hospitality. The scale of these shattering increases will be unsustainable for many businesses and the decision to exclude hospitality from any support will only drive further job losses and businesses closures.

“Communities and their local hospitality venues will be the ones bearing the brunt of an unjust system that has long been broken, despite promises to reform it for the better. The system is in dire need of reform and the Welsh government’s efforts barely touch the side of what is required.” 

He added: “It is now vital that the Welsh government commits to using, in full, any additional funds flowing from additional support in England to support hospitality businesses. All political parties seem to agree that hospitality is unfairly treated by the business rates system, yet still nothing happens. That must change.”