​Hospitality Sector Braces for Financial Impact as Business Rates Relief Nears End

UKHospitality, a prominent trade body representing the UK's hospitality industry, has raised serious concerns over the impending financial burden businesses could face without further government support on business rates. The organisation has warned that operators may see their bills significantly increase if the current relief on business rates is not extended beyond its planned expiration date of 31 March 2025.

The potential financial impact could be substantial. UKHospitality reports that a local pub could face an additional £11,000 in business rates once the current 75% discount, valued at up to £110,000, comes to an end. A restaurant in a town centre could see its rates bill rise by £30,000, while a seaside hotel could be hit with an additional £40,000 in costs. These increases pose serious risks to the viability of many businesses across the country.

Kate Nicholls, chief executive of UKHospitality, highlighted the gravity of the situation: "Hospitality businesses are facing a devastating cliff-edge next April when many will see their bills quadruple." She stressed that the looming increase, which could collectively amount to nearly a billion pounds for the industry, is unsustainable. Nicholls warned that businesses may be forced to close, reduce staffing levels, or cancel planned investments without intervention. These outcomes, she emphasised, would be detrimental not only to the businesses themselves but also to the employees, local communities, and the broader economy.

UKHospitality has called on Chancellor Rachel Reeves to use her upcoming Budget, the first since Labour's election victory in 2024, to introduce a new, lower, permanent business rates multiplier for the hospitality sector. This adjustment, they argue, would provide much-needed stability and predictability for businesses. Labour's manifesto committed to reforming the business rate system to level the playing field between high street businesses and large online corporations. However, no formal plans were outlined in July's King's Speech.

Nicholls urged for immediate action, stating, "there has to be a solution that avoids this cliff edge, and a lower, permanent and universal multiplier for hospitality would deliver that." Such a measure, she contended, would offer businesses the certainty they need and allow the government to fulfil its manifesto commitments. She further warned of the severe consequences if no action is taken, stressing that the survival of businesses from pubs to hotels to family entertainment centres could be at stake.

The upcoming Budget presents an opportunity for the Chancellor to prevent what many see as an impending crisis for the hospitality sector. As the deadline for business rate relief approaches, UK Hospitality continues to advocate for long-term reform to ensure the survival and growth of an industry critical to the UK's economic landscape.