The trade body claims the increases will wipe out more than half of the annual spend associated with Small Business Saturday, the nationwide initiative that promotes independent businesses and encourages consumers to support local high streets each December.
The trade body said the smallest venues with a rateable value below £51k will see sharp rises as the current system unravels following last week’s Budget.
UKHospitality’s figures show
- a £38.6m increase in 2026-27 equal to a 13% rise
- a £110.6m increase in 2027-28 equal to a 38% rise
- a £168.5m increase in 2028-29 equal to a 58% rise
£318m rates hit
Over the three year period this totals £318m in additional rates for small hospitality businesses, which is more than half of the £634m typically generated each year through Small Business Saturday on 6 December.
In a letter sent to MPs the trade body said the outcome was contrary to the Government’s manifesto commitment to level the playing field between the high street and online giants.
It added repeated ministerial claims of reduced taxes for the sector did not reflect the reality facing operators.
Even with the reduced multiplier UKHospitality said the average pub will see business rates rise by 76% more than three years and the average hotel by 115%. This compares with a 16% rise for distribution warehouses and just 4% for large supermarkets.
The body urged the Government to increase the business rates discount for hospitality to the full 20p allowed in legislation or commit to delaying business rates revaluation levels and freeze them at 2023.
‘Very real threat’
Chief executive Allen Simpson said the increases pose a very real threat to high streets and small businesses.
“On the day we celebrate and support small businesses the Government’s business rates policy is doing the opposite,” he continued. “Hospitality and the high street is being taxed out and all too often the most vulnerable businesses are small businesses. There’s no doubt that we will see business closures job losses and price increases all accelerate as a result of these changes.
“Every single high street is going to feel a massive hit and so will our communities when much loved venues are forced to close as a result of this policy.”
Simpson said the Government has the power to fix the situation. “I hope they recognise the very real threat these increases present to our high streets and act urgently.”
In his letter to MPs Simpson added: “Many Members of Parliament have raised concerns they believed from the Budget speech that business rates bills for hospitality businesses in England were falling to support the high street and that the move would be paid for by higher taxes on the online giants.
“I am clear that MPs concerns are correct. Far from a tax cut on hospitality this is an unprecedented tax rise which disproportionately harms hospitality and protects the online giants and supermarkets.
“Without intervention we face business closures reduced investment and a contraction in youth employment.”
