The UK government has only recently announced a reduction in tax rates for the pub and hospitality industry. This shift seeks to provide long overdue respite to places still faltering in the wake of our pandemic chapter. This is because the Independent Valuation Office has returned a much higher assessed value for these properties. This massive change adds a new layer of complexity and confusion for business owners. The Chancellor made a cut to business rate discounts, reducing them from 75% to 40%. Beginning in April 2024, he wants to phase out those subsidies entirely.
While the government’s business rates reforms were welcomed by many, several in the hospitality sector have since been left worrying about surviving to see another budget. While the reduction in tax rates may seem beneficial, the substantial increase in property valuations raises questions about the sustainability of this relief. Even still, most operators are gripped with dread that these changes won’t deliver them the level of financial assistance necessary for them to endure.
Jon Collins, another leading light of our industry, urged the call for more helping hands to go further.
“If the government is preparing a U-turn on business rates for pubs, it must not leave live events and arenas behind.” – Jon Collins
The ramifications of lowering business rates for pubs go beyond simply providing short-term fiscal assistance. Community gyms, pools and leisure centres are raising the alarm over their long-term survival. They are responding to the upcoming cuts to their rebates. As a spokesperson for leisure centres, Huw Edwards warned that dire results could follow.
“Failure to provide a business rates support package to gyms, pools and leisure centres will lead to higher prices, reduced services, redundancies and in some cases the loss of gyms from our communities,” – Huw Edwards
Dame Caroline Dinenage wrapped up those sentiments, emphasizing the nervous state of limbo many venues are in.
“Venues, clubs and cinemas up and down the country are already struggling for survival,” – Dame Caroline Dinenage
The battle for an equitable business rates reform is just getting started. Among stakeholders, there are increasing calls to expand the range of sectors covered by any future amendments. As BIRA policy chief Andrew Goodacre told us, independent retailers are just as badly affected as pubs and have been ignored in this debate.
“Perhaps independent retailers need to follow the pubs’ example and start banning MPs from their premises too,” – Andrew Goodacre
Goodacre went on to say that businesses in industries beyond the hospitality sector are dealing with these oppressive financial pressures. He urged policymakers to recognize that they “face exactly the same challenges as pubs but have been left out of discussions about additional support.”
Critics say the federal government’s response doesn’t go nearly far enough, focusing on stopgap measures. Critics think it doesn’t do enough to address the underlying problems with the business rates system itself. Helen Dickinson, chief executive of the RSA said, what we need is not tinkering around the edges, but a fundamental re-set.
“This latest announcement looks like another sticking plaster on a broken system rather than the more fundamental reform required.” – Helen Dickinson
Rachel Reeves, a central figure in these discussions, has reacted to rising fears. She did not shy away from the hard truths that all sectors, especially government, are currently grappling with. She underscored how seriously the government is already taking this by doing their homework and engaging with industry stakeholders. They are determining the impacts of proposed policies on businesses.
“Now we’re working with the sector to look at the implications of a range of policies and looking at planning and licensing,” – Rachel Reeves
Reeves reiterated her dedication to helping pubs and high streets weather the storm during these rocky times.
“I want to support our pubs; I want to support our high streets. That’s why we made the change to the rates. But I recognise that many paths are still struggling and we’re working with them.” – Rachel Reeves
Talks about the future of business rates continue. Federal advocates differing vision. It’s too early to say how many enterprises will permanently prosper using the latest tax cuts, or even how well these changes can address the broader issues plaguing the industry. Stakeholders across various sectors are calling for a more inclusive approach to ensure that all struggling businesses receive adequate support.