hospitalitytoday. com | 13
Business rates explained by Andrew Jacobs( below), Head of the Real Estate Department at Seddons
The hospitality sector, and restauranteurs in particular, are deeply concerned about the impending rise in business rates – due to increase by an average of one-fifth from April this year. London restaurants will collectively pay an additional £ 42.7m in 2017-18, according to research from business rates firm CVS. This has created resentment in the competitive restaurant industry in London, and is likely to mean higher prices on menus, with particular pressure felt by independent outlets.
All businesses with properties that have a so-called rateable value above £ 12,000 have to pay business rates. The last time rates were set was seven years ago, but property price changes since then have led to big winners and losers. Rates will fall for 920,000 businesses, remain the same for another 420,000, and increase for 510,000.
A spokesman for the Department for Communities and Local Government said:“ The great British pub is a national asset, providing thousands of jobs and boosting the economy by £ 21 billion a year. The method of valuing pubs was agreed by the five major trade bodies and has not changed.
What are business rates?
First introduced in 1990, business rates are a national tax on the occupation of a non-domestic property, such as shops, offices, pubs, restaurants, and warehouses. They are a major part of the government’ s tax revenue, amounting to £ 26bn per year. Business rate valuations are based on rental values, which is determined by the‘ rateable value’ of a
“ Following the revaluation, three quarters of properties will see no change or even a fall in their bills, and the small minority of businesses that face an increase will benefit from our £ 3.6 billion transitional relief scheme.”
The chains that have written to Mr Hammond say:“ We would urge you to consider reviewing the transitional relief provisions and the introduction of sectorspecific hospitality retail relief to help businesses plan and invest with confidence.”