The call comes as the Government’s reform of the business rates system, which it said will provide a permanently lower level of business rates for the sector, the Non-Domestic Rating (Multipliers and Private Schools) Act received Royal Assent, becoming law. However, this legislation will not be implemented until April 2026.
The reform intends to produce a permanently lower business rate multiplier for hospitality, leisure and high street retail business premises.
Business rates are calculated by multiplying the property’s rateable value, an estimate of open market rent, by figures set by the Government each year.
Multiplier details
The multiplier depends on the value of the property with venues paying the amount for every £1 of rateable value.
The trade association also called for hospitality properties with a rateable value of more than £500,000 to be exempt from the multiplier surcharge, in line with the Government’s intention to level the playing field for the sector.
UKH chief executive Kate Nicholls said she was “delighted” the Government was taking action calling it a “landmark” moment.
“With the finer details set to be unveiled in the autumn, the Government now needs to ensure this is meaningful by offering the maximum discount for hospitality businesses, after decades of paying significantly more than their fair share. It should also exempt hospitality businesses from the surcharge,” she said.
System rebalance
“A permanently lower level of business rates will truly benefit hospitality businesses and, crucially, rebalance a system that has unfairly overtaxed the high street by billions of pounds.”
She said she remained optimistic about business rates reform and its ability to give operators some of the financial respite they desperately need. But she highlighted that this would not scratch the surface of the £3.4bn annual cost increases hitting the hospitality sector this month.
“We are urging the Government to work with us to enable hospitality businesses to unlock growth and jobs,” Nicholls said.
During a consultation in the House of Commons in December, the industry leaders told the Non-Domestic rating Bill Committee that business rates would continue to be a “barrier to investment” for the hospitality sector, leaving pubs “uniquely disadvantaged.”
