The Three Hills is a small village pub/restaurant with rooms in Bartlow, Cambridgeshire that has achieved phenomenal success and national recognition in the five years we have been open.
In 2022 we added the title “Best Rural/Country Pub in the UK” (Great British Pub Awards) to our Michelin Plate, 2 AA Rosettes, Best Cambridgeshire Pub (National Pub and Bar Awards) and our Highest Newcomer Award in the Estrella Damm Top50 Gastropubs in 2021, coming in at number 23.
Yet, despite these successes, even before Covid, the Ukraine war and the energy crisis, times have always been tough. It seems no matter what we do, no matter how efficiently we run our business, we are subject to such a burden of taxes and overheads that there is no room to grow and we are slowly being suffocated.
The first 20% of every sale in our business goes to the Government in the form of VAT. Across Europe, the majority of countries charge lower rates of VAT for restaurants and those operating hotel accommodation, recognising the undeniably important role the hospitality industry plays in the economy.
In France, Italy and Spain restaurants and hotels are charged 10%. In Germany the VAT rate charged restaurants and hotels continues to be held at 7% until the end of 2023, due to inflation concerns.
Moving on to business rates; when we purchased The Three Hills and invested a significant amount of money into it, its rateable value was £14,000. When we reopened, we were slapped with a new assessment of £57,000.
And what do we receive for paying business rates? Absolutely nothing. We don’t even get our bins emptied by the council. For this we pay an additional sum of around £3,500 a year.
I have often found myself wondering why the Government would want to disincentive investment in this way. We have created a thriving community hub in the smallest village in Cambridgeshire, without our investment the pub would have joined the ranks of failed and empty pubs that blight our rural landscape.
What has happened to our country which used to reward entrepreneurship? Does the Government really want to preside over a continuous decline in the kerb appeal of the British countryside?
Phenomenal extra burden
Additionally, most of our staff fall in the 23 plus age bracket, and in April we face a mandatory hike of 10% in our wage bill for this group, the ramifications of which mean we will have to look at the pay rates for all our staff. We want to pay our staff well - they deserve it - they are some of the hardest working young people out there - but in this environment it’s a real challenge.
Finally, everyone knows what has happened to energy costs, and our experience is no different to anyone else’s. The difference for hospitality businesses is we can’t run our appliances during the cheapest time of the day (between midnight and 6.30am), or turn our heat down and ask customers to keep their coats on.
They will simply stop coming. Hospitality is meant to be hospitable, and that means carrying on as before, whilst trying our hardest to make as many small savings as we can.
We understand the Government can’t continue to bail businesses out, but this is a Government that simply hasn’t looked after our domestic energy needs, with the result that many are struggling to survive with this phenomenal extra burden on overheads.
If the Government doesn’t want to see the further collapse of a once vibrant pub and restaurant industry, something has to give.