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| Hospitality Today | Feb / March 2017
Hospitality businesses hardest hit with hike in business rates
Britain’ s high streets face losing some of their most popular pubs and restaurants because of big rises in business rates, Philip Hammond has been warned.
Hospitality businesses including Pizza Express, Greene King, Wagamama, All Bar One and Slug & Lettuce have written to the chancellor to ask him to rethink a plan under which some outlets will be hit with a 42 % increase in their rates this year.
There have been complaints from across the business world over the rates, which have also caused concern among Tory MPs worried about closures on high streets in their constituencies. Independent outlets feel particularly vulnerable and businesses are asking that Mr Hammond use his budget next month to reduce the huge increases.
Pub and restaurant chains directly employing more than a million people have signed a letter to the chancellor, warning that the rises some are facing will damage their ability to help to make a success of Brexit.
They state that many companies in the hospitality sector were“ not prepared for the significant rises resulting from the latest revaluation”.
“ This will add a further £ 300 million to £ 500 million in additional cost in the hospitality
sector,” they write.“ Margins in our sector are already under intense pressure, due to the cumulative impact of increased wage, training and regulatory costs and there is a very real danger that these increases will result in a freeze in investment and a scaling back of new openings and job creation.
“ We have already seen evidence of outlets closing as a result of the planned increase. Modern pubs, bars and restaurants are valuable social, economic and community assets- they contribute to our thriving tourism sector, high street regeneration and attract and support significant inward investment.
“ As such, they are well placed to capitalise on the opportunities presented by Brexit, but they will not be able to do so if hampered by unsustainable additional costs.”
The new business rates will apply from April. Ministers have also lifted the cap on the amount by which bills can increase in the first year from 12.5 % to 42 %. Some pub landlords have claimed that they are facing eventual increases of as much as 516 %.