Earlier this week, the Welsh Government launched a consultation on cutting rates for retail shops paying less than £51,000 in business rates, which it estimated could affect some 13,000 businesses, in a bid to help them compete with online retailers.
However, the proposals “ignored” the hospitality sector and the severe challenges it faces, UKHospitality Cymru has said.
The trade body added returning the sector to full business rates, on top of enormous cost increases this year, and excluding it from the reform would see bills dramatically increase yet again.
Unique challenges
This would be unsustainable for many and force businesses to cut jobs, reduce trading hours or, in the worst-case scenario, close for good, it added.
UKHospitality Cymru executive director David Chapman said: “The Welsh Government claims it recognises the ‘unique challenges’ faced by bricks and mortar businesses, yet it has simply ignored and overlooked hospitality as one of the sectors most impacted long-term by the broken business rates system.
“These plans would see bills dramatically hiked, by the tens of thousands for many, and force businesses to reduce their hours, cut jobs and see many close for good – all of which would be a direct consequence of the Welsh Government’s actions.
“It will make Wales a significantly worse place to do business and see investment in hospitality diverted to the other side of the border to England.”
UKHospitality Cymru called for “wholesale revision” of the plans, which would see only the smallest retail stores benefit, to ensure hospitality venues were also eligible for a lower multiplier and therefore able to benefit from lower rates bills.
Catastrophic damage
Chapman continued: “It is a fact that hospitality businesses pay three times more than their fair share in business rates – something the UK Government has recognised and is addressing in its own business rates reform.
“I urge the Welsh Government to recognise the catastrophic damage these proposals would wreak and take them back to the drawing board for wholesale revision.
“Reduce rates across the hospitality sector and let us continue to rebuild, serve our communities, create jobs for local people and play a key role in fostering economic growth.”
If approved, the changes for retail businesses would come into effect on 1 April 2026, with the exact rates set during the Welsh Government’s budget planning for 2026-27.
The Welsh Retail Consortium described the proposals as a “mixed bag” for retailers.
