The UK government has been urged to permanently reduce business rates to support the hospitality sector, which has historically overpaid in taxes by £2.4 billion annually. UKHospitality, representing the hospitality industry, presented compelling evidence to the Public Bill Committee regarding the Non-Domestic Rating (Multipliers and Private Schools) Bill. According to the proposal, properties with a rateable value under £500,000 would benefit from a 20p reduction per pound compared to the small business multiplier. While the policy aims to provide financial relief, UKHospitality’s Chief Executive, Kate Nicholls, raised concerns about the potential adverse impact on businesses with a rateable value over £500,000. If these businesses are subjected to higher rates, it could contradict the policy’s intended purpose of alleviating the tax burden on the hospitality sector.
Addressing Overburdened Hospitality Businesses
Nicholls suggested two solutions to address these concerns: either exclude high-value businesses from the higher multiplier surcharge or maintain their rates at current levels. Implementing one of these solutions would correct the long-standing overtaxation that the sector has been subjected to. UKHospitality argues that such measures are essential to ensuring fairness and equity for all hospitality businesses, irrespective of their rateable value. Nicholls expressed optimism that the government would consider these recommendations and amend the proposal to provide an equitable reduction in business rates across the entire sector. By doing so, the government could support a critical industry that contributes significantly to the economy, particularly in light of the financial challenges brought on by the pandemic. The hospitality sector’s call for a permanent reduction in business rates aims to create a more balanced tax system, fostering growth and stability for businesses of all sizes.
