In the Autumn Statement, the Chancellor Jeremy Hunt announced an extension of business rates relief. This extension was a significant win for our members and comes off the back of significant campaigning by UKHospitality.
The relief was an extension of an existing scheme for a further year, with no downward transition and a freeze in the multiplier.
What does this mean for me?
The business rates multiplier was frozen at 51.2p for larger properties and 49.9p for smaller properties. Smaller properties are those with a rateable value (RV) under £51,000. This means that bills are 6% lower than they would have been before freezes are applied.
The business rates relief for the sector was extended for a further year and increased from 50% to 75%. However, this remains subject to a cap of £110,000 per business. This is one frustrating element and something that we will continue to campaign against.
There will be no downward transitional relief but there will be a cap on increases, in line with our asks in our consultation response. Transition is designed to stop excessive increases but is traditionally paid for by capping downward movements.
With hospitality expecting a fall in overall rental values at revaluation 2023, this is extremely positive.
The upward caps are 5%, 15% and 30% for small, medium and large businesses respectively in 2023/24. Small businesses are defined as below £20,000 RV, or £28,000 in London, medium businesses between £20k and £100k, and large businesses above £100k.
The Government has confirmed they will not be taking forward an Online Sales Tax, ruling out a key potential measure from the more fundamental upcoming reform of business rates.
New rateable values
Overall, the vast majority of hospitality venues saw reductions.
Hotels saw the biggest declines and restaurants saw the smallest decline. Nightclubs are the exception, with their rateable values increase by 2-3%.
Hotels saw the biggest decline, with an average reduction in rateable value of 28%.
Pubs and wine bars saw a healthy decline in rateable value of 13%, on average.
Restaurants and cafes saw the smallest decline, averaging 2%.
Nightclubs are the outlier, with an average increase of between 2 and 3%.