New analysis from UKHospitality and the British Retail
Consortium reveals that the sectors collectively pay one third of
all business rates in the UK, while accounting for 9% of the
economy.
Both organisations are united in their call for the Chancellor to
implement a fairer level of business rates for hospitality and
retail at the Budget, which will rebalance a system that unfairly
punishes our high streets and town centres. This was a manifesto
pledge from Labour ahead of the election.
A lower rate for hospitality and retail, which together employ
around six million people, would unlock investment in our high
streets, while also stemming the loss of shops, pubs, restaurants
and hotels, and the jobs that rely on them.
In 2023/24, retail and hospitality businesses combined to pay
almost £9 billion in business rates, 34% of the overall rates
bill, while accounting for only 9% of the overall economy.
Current business rates relief for retail and hospitality is set
to end on 31 March, costing the sectors a combined £2.5bn. That
would take their bill up to £11bn, accounting for 44% of total
rates.
Helen Dickinson, Chief Executive of the British Retail
Consortium, said:
“Consumers want diverse and thriving high streets, but this is
held back by the broken business rates system. It is the biggest
barrier to local investment and prevents the creation of new
shops and jobs.
“Already, the industry pays far more than its fair share – retail
accounts for 5% of the economy, but pays 7.4% of all business
taxes, and over 20% of all business rates. The Budget is a great
opportunity to right this imbalance, ensuring that retail pays a
fairer level of business rates.”
Kate Nicholls, Chief Executive of UKHospitality,
said:
“Hospitality is at the heart of our communities but the enormous
value it delivers both socially and economically is under threat
from the inflated business rates bill the sector has to foot.
“High street businesses paying one third of all business rates is
absurd and one of the primary reasons why we see our businesses
facing financial challenges – it makes running a pub, bar, café
or restaurant, to name a few, incredibly expensive.
“Introducing a reduced level of business rates for the high
street at the Budget can unlock millions in investment – from new
venues to more jobs. Crucially, it would save our high street
from countless closures if hospitality had to bear a billion
pound business rates hike in April.”
