Industry bosses have reiterated calls for business rates equality for pubs and restaurants following reports that Amazon is set to receive a business rates cut.
Although pubs, bars and restaurants are crucial employers and drivers of growth for the UK economy, the sector faces extortionate business rates hikes over the coming months.
Reports this week suggest more than 17,000 pubs are looking at an average 19% increase in their bills.
Kate Nicholls, chief executive of industry association ALMR, said many businesses will struggle to absorb the costs. “Investment and jobs are at risk if the Government does not act quickly to tackle this problem. The current system is unfair and so complex for high street retailers that it risks scaring away investment from overseas.”
The situation was compounded this week when it was claimed that the changes in the system would actually benefit online retail giant Amazon, as levies will be cut on its regional warehouses even though rates for its head office in London will increase.
“The government has reportedly seen fit to lower Amazon’s business rates bill but numerous small businesses across the country, businesses that contribute to both the economic and social fabric of our high streets, are to get no such help,” said Nicholls. “Pubs and restaurants pay over a third of turnover in taxes whereas Amazon paid just £11.9m in tax in 2015 despite £5.3 billion in sales.”
She urged the government to take action by reforming business rates and providing transitional relief for “valuable, hardworking pubs and bars” that otherwise face the risk of being priced out of business.
Back in December, a number of leading bosses from chains such as Yo! Sushi, Pizza Express and Wagamama wrote a letter to the Prime Minister calling for her to alleviate the enormous cost pressure the industry faces from restaurant hikes.
Leon Restaurants said its outlet in The Strand alone faces business rates going up by £24,000 this year. And last week JD Wetherspoon founder Tim Martin called it a “very burdensome” tax. “For us the cost increase is about £7m in the first year,” he revealed.