UKHospitality (UKH) and the British Retail Consortium (BRC) have called on the Government to exempt hospitality and retail outlets from the surcharge, which the associations estimated would see 5,000 high street properties with a rateable value of more than £500,000 impacted by a higher tax rate.
Furthermore, the 500 larger venues employ around 120,000 people, which would be affected by any closures.
UKH chair Kate Nicholls said: “The broken business rates system has punished bricks and mortar hospitality businesses for decades, with our sector paying three times more than its fair share.
“Reform of the system is long overdue and we now need to see the Government deliver in full its pledge to level the playing field for the high street.
“That means implementing the maximum possible rates discount for properties below £500,000 rateable value and exempting larger hospitality properties from the surcharge."
Extortionate figure
She added: “Delivering both those measures is the only way to fulfil that commitment and prevent hospitality businesses from being taxed out.
“The sector was hit by a £3.4bn annual cost increase in April and the threat of this surcharge will only increase this already extortionate figure.
“Hospitality has the ability to create jobs, support local communities to help them thrive and regenerate our high streets - we need the Government to back us in order to develop locations where people want to live, work and invest.”
The BRC, which represents UK retail businesses warned the surcharge would add to inflationary pressures.
Chief executive Helen Dickinson said: “Thriving high streets depend on a vibrant mix of outlets - from shops and cafés to restaurants and entertainment venues.
“Large retailers are central to this ecosystem, drawing people into town and city centres and boosting footfall for surrounding businesses.”
Significant investment
Dickinson added: “They provide significant local investment as well as around 1m jobs for people at all stages of their career.
“Over the past year, retailers have faced an additional £7bn in costs - from higher national insurance contributions to new packaging taxes.
“Introducing a business rates surtax would only add to inflationary pressures, leading to store closures and job losses.
“We urge the Chancellor to exempt these businesses from the surtax, helping safeguard hundreds of anchor stores and the vital jobs they sustain.”
Earlier this month (October), the Government confirmed the scope of new lower business rates multipliers for retail, hospitality and leisure, which are due to come into effect from 1 April next year.
Under the new system, two permanent lower multipliers will apply to qualifying properties in England with a rateable value below £500,000:
- Small Business RHL Multiplier - for premises with a rateable value under £51,000
- Standard RHL Multiplier - for those with a rateable value between £51,000 and £499,999
