Editor’s view: Tax talk casts a shadow over industry’s liquidity

Andrew Seymour grayscale

What’s the biggest threat to high street restaurant operators? Excessive competition? Apathetic customers? Property prices? All of the above bring their own unique set of challenges, but it’s the threat of rising business taxes that are leaving some corners of the industry up in arms.

The Association of Licensed Multiple Retailers (ALMR) is one such organisation that has voiced its fears on the subject, calling on Chancellor George Osbourne to be more radical in his reform of business rates to lessen the impact of tax rises on UK restaurant operators.

Urgent action is clearly needed after figures released in the wake of the latest Budget showed the scale of tax increases expected to hit pubs and restaurants over the next two years.

HM Treasury’s ‘red book’ outlining the Government’s Summer Budget details a forecasted increase in business rates from £27.3 billion in 2014-15 to £32.9 billion in 2020-21 and the publication of responses to an initial review of business rates administration shows strong opposition from local authorities to any changes being made to the current regime.

Business rates remain a major barrier to increasing competitiveness and productivity in the hospitality sector. A forecasted increase in business rates receipts over the next six years does nothing to quell the concerns of those who have repeatedly warned that the UK’s high streets are being crippled.

As the ALMR’s chief executive, Kate Nicholls, cautions: “Increasing bills by a fifth at a time when businesses will be prioritising investment in wages is frankly unsustainable and it is high street businesses like pubs, bars and restaurants which will bear the brunt of it.”

The more money that operators are forced to put into the public purse, the less they have available to make the sort of investments that drive growth, be it opening new stores or equipping existing ones.

The topic of tax is one the whole industry should be keeping a close eye on.

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