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A one-year extension of business rates relief for hospitality was a key announcement in Chancellor Jeremy Hunt’s Autumn Statement – alongside a warning that it can’t last forever.
And while the temporary measure is guaranteed in England, businesses in Scotland and Wales will have to press their governments to match it.
The 75 per cent discount applies to hospitality, leisure and retail operations and was launched as an emergency measure to support businesses bearing the brunt of the financial effects of the Covid-19 pandemic and allows them to claim relief of up to £110,000.
The Chancellor also announced the small business multiplier will be frozen for another year, although the standard business multiplier will increase by 6.4 per cent. The multiplier is used with properties’ rateable values to calculate the actual amount due.
Freezing the small business multiplier was welcomed by UKHospitality chief executive Kate Nicholls as it would ‘help those most vulnerable to keep the lights on’.
She said: “The chancellor has brought forward a significant package of business rates measures that will help hospitality businesses across the country. UKHospitality led the calls for government to extend relief and take action on the multiplier, and I’m delighted the chancellor has acted on our asks.
“The decision to freeze the small business multiplier will help those most vulnerable keep the lights on. However, the standard multiplier rising by 6.4 per cent will see businesses representing almost two-thirds of the sector’s trade still facing a £150m rates hike. This will only put more pressure on consumer prices and inflation, at a time when businesses are still grappling with high costs of energy, food, drink and wages.”
National Insurance will be cut from 12 to 10 per cent from 6 January 2024 and Class 2 National Insurance for self-employed people is to be abolished. Nicholls said it was disappointing that employer contributions to National Insurance had not also been cut.
Freezing alcohol duty until August next year was welcomed, alongside proposals to reform the planning system which could remove barriers to business investment.
Meanwhile UKHospitality Scotland Executive Director Leon Thompson and the sector’s businesses there will be pressing the Scottish government to match all this, particularly on business rates.
Thompson says: “The extension of the business rates relief scheme, as outlined by the Chancellor in the Autumn Statement, is excellent news for pubs, bars, restaurants and hotels in England. However, it is vital that funds allocated to the Scottish Government are now put towards business rates relief for Scottish hospitality businesses.
In Scotland the amount of rates payable is calculated by multiplying the Rateable Value by a poundage rate, currently set at 49.8p, with larger businesses with a Rateable Value over £51,000 paying a poundage supplement of 1.3p, and those with an RV of £100,000 plus liable to a supplement of 2.6p, which contributes towards the cost of the Small Business Bonus Scheme.
Thompson explains: “There was no relief last year, which created a competitive disadvantage with the rest of the UK and brought about further pain for businesses in Scotland. Receiving the full 75 per cent relief is essential to ensure that more venues can focus on thriving and not just surviving.
“UKHospitality Scotland has also called on the Scottish Government to freeze the poundage rate this year. By doing this the Scottish Government can ensure our businesses benefit in full from a package of support that can help deliver growth in the Scottish economy.”
Business rates relief and a freeze on the poundage in next month’s Scottish Budget would help Scottish hospitality blossom, he says.
In Wales David Chapman, Executive Director, UKHospitality Cymru, says: “It is now critical for Welsh hospitality businesses that funds allocated to the Welsh Government are once again put towards a relief scheme, as well as to ensure rates are frozen.
“The rates relief put in place last year proved to be a lifeline for businesses and we would encourage the Government to extend this again. It will afford businesses some much-needed headroom and the certainty they need to invest and grow their businesses, instead of just focusing on survival.”