Inflation poised to drop a £864m rates bombshell

With the rate of inflation in September revealed as 6.7%, it is now confirmed that the planned inflation-linked rise in April will cost hospitality businesses an additional £234m. With the £630m that the ending of rates relief would simultaneously represent, this combination would leave hospitality facing a huge £864m in business rates.

UKHospitality Chief Executive Kate Nicholls says: “Today’s figures finally confirm the bleak picture facing hospitality businesses next April. Almost a billion pounds in extra costs from business rates alone is unfathomable – and insurmountable - for many.

“Such dramatic cost increases would undoubtedly be the final nail in the coffin for many businesses. It would be particularly perilous for small, independent businesses, for which ongoing relief measures are a lifeline at a challenging time.

“Hospitality is at the heart of our communities and it’s essential we do all we can to protect hospitality businesses and the value they bring from driving economic growth to creating jobs.

“It’s imperative that the Chancellor takes clear action at the Autumn Statement to extend the current relief measures for a further year to protect the vital community assets that make up the UK’s vibrant hospitality sector.”

In order to avoid this unaffordable rise and keep businesses from closing as a result,leading trade body, UKHospitality is urging the Chancellor to freeze the business rates multiplier and avoid an inflation linked rise, saving businesses £234m.  It is also asking that he maintain the business rates relief for hospitality businesses at 75%, thus saving the sector £630m.

UKHospitality is also asking businesses to write to their MPs to stress the need for action at the Autumn Statement, with an easy-to-use tool made available by UKHospitality to ensure parliamentarians are aware of the urgency of the situation.

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