Hospitality overpaying business rates by 300%

Trade groups UK Hospitality and the British Institute of Innkeeping (BII) are calling for a ‘wide-ranging’ reform of the business rates system, which puts an ‘unfair burden’ on venues.

The trade bodies said they welcomed the chance to comment on the UK government’s Business Rates Revaluations Consultation and support a move to up the rate of evaluations to every three years.

However, the groups warned this action ‘cannot come at the cost of extra reporting, restrictions on appeals and penalties’.

The trade bodies called for a more ‘wide-ranging reform to redress the unjust and imbalanced current system, and the need to move taxation away from property’.

Furthermore, the hospitality sector overpays by 300% when compared to its turnover in the current system, the groups claimed.

UK Hospitality and the BII voiced their concerns over further proposals in the consultation, which would place a ‘significant administrative burden’ on hospitality firms.

The trade bodies said in a joint statement: “The current business rates system has long been unfit for purpose and puts an unfair burden on pub and hospitality businesses.

“It’s extremely encouraging that the government is proposing to increase the frequency of revaluations, something for which we have been calling for some time. However, the proposals are severely undermined by administrative burdens, limits on appeals and penalties.”

‘Critical time’

As such, the trade associations recommended that businesses should not be asked for more information in the revaluation than what the current system requests.

The groups said that the need to report additional amendments would be ‘burdensome and will actively discourage investment in the sector at a critical time’.

In addition, the trade bodies said the move to three-yearly revaluations should be considered as part of the broader review of business rates. They also suggested that businesses should not be charged for challenges and called for the removal of fixed time periods to bring a challenge forward.

The time between the antecedent valuation date (AVD) and the new list should be minimised to 18 months or lower, the organisations recommended.

The groups added that while the proposal is helpful, it “does not redress the wide-ranging issues with the current system that will severely hamper the sector’s ability to recover from the pandemic if not addressed”.

The statement continued: “We urge the government to work closely with the sector to implement wide-ranging reform that will empower hospitality businesses, to rebuild and repair revenues, create jobs and be at the forefront of the economic recovery.”

Just over half of consumers visited a hospitality venue in the first 10 days after lockdown restrictions were lifted in England last month, according to a survey.