The industry’s largest hospitality body has accused the government of a “missed opportunity” to deliver meaningful tax reform following the publication of today’s Spring Statement.
Restaurant chains had been hoping that Philip Hammond would provide some much-needed relief to the sector in the wake of a volatile start to the year, with some of the biggest names even writing to him earlier this week for support.
But in a shorter-than-usual statement released today, the only thing the Chancellor pledged to do was bring forward the next business rates evaluation to 2021.
“At Autumn Budget 2017 it was announced that business rates revaluations will take place every three years, rather than every five years, following the next revaluation. This makes bills more accurately reflect the current rental value of properties,” he said.
“Spring Statement 2018 announces that the next revaluation, currently due in 2022, will be brought forward to 2021. This will mean businesses can benefit from the change to three-year revaluations earlier, with the first taking place in 2024.”
Business rates generate almost £24 billion for the UK, but Colliers International estimates that the total rateable value of some high street chains has increased by as much as 40%.
And UKHospitality, the trade body created through the merger of the ALMR and the BHA, said the government has not gone far enough.
“There are some tentative steps here to support the sector but this is a missed opportunity to provide the decisive and positive action on business rates that hospitality desperately needs, and for which we have been calling,” said chief executive Kate Nicholls.
“Bringing forward the revaluation will not provide the immediate support that businesses need unless it is accompanied by widescale reform beforehand. A focus on taxing digital businesses is welcome but it needs to also tackle inequalities in business rates between digital companies and high street operators. If that is not addressed then businesses will continue to struggle against crippling rates bills, and jobs and investment will be at risk. UKHospitality will continue to push the Government to deliver on their promise of root and branch reform.”
Meanwhile, the government has promised a consultation on plastics, which will provide an opportunity to highlight the proactive measures the sector is already taking to address the issue of waste, for which UKHospitality insists there is a real appetite from consumers.
“Change must come via positive voluntary action, rather than punitive legislation that penalises and burdens businesses without solving the problem. A consultation will give us an opportunity to ensure that the government understands this and works with us,” said Mrs Nicholls.
The UK government’s latest dossier on business rates can be downloaded HERE.