UKHospitality welcomes new APPG report that calls for action on business rates reform to support se
09 October 2019
Posted by: Chris Banks
UKHospitality, the single, authoritative voice for the hospitality sector, has come out in full support of the latest report from the All Party Parliamentary Group for Hospitality (APPG) which calls for urgent action to reform the current outdated business rates system.
The report again highlights the unfair nature of the current system that sees the hospitality sector is hit disproportionately hard, it also draws links between rates and the overall tax burden placed on hospitality businesses as a key contributor to the high street crisis.
As well as highlighting the pressures and ongoing issues around the current outdated system, the report also brings forward a number of practical solutions to make the system fairer for hospitality businesses. These include:
· A Royal Commission should be set up to identify systemic reforms to the current system and look to facilitate an overall reduction in the burden of taxation for the hospitality sector
· A review of business rates must take into account the importance that hospitality businesses have within their communities, including changes to reliefs policy and an examination of state aid rules which prohibit business rates reliefs to multiple properties
· A business rates ‘pause’ should be given following investment in a property. The APPG advocates a pause of two years for revaluation following an investment
· The Digital Services Tax should be beefed up, and the proceeds of this tax should be used to provide reliefs to sectors like hospitality. This should also be supported by a 2% tax on Digital Goods to ensure that local government is adequately funded
· Greater consideration must be given to the current system of valuations, including frequency and methodology, an approach used in the Netherlands
· More funding should be allocated to the VOA, which is currently under-resourced and underperforming. The Check, Challenge, Appeal system should be reviewed as many businesses are not paying the correct amount with very little immediate remedy.
Kate Nicholls, CEO of UKHospitality and Secretariat of the All Party Parliamentary Group for Hospitality, comments: “We welcome this important report as for too long, business rates have failed to reflect the realities of business in the 21st Century and high streets have been hit hard. It has become clear that business rates are a major contributor to the distress being felt on Britain’s high streets and action is needed to ensure these can return to being thriving community hubs.
“The current business rates regime clearly discriminates against the hospitality sector, which overpays by over £2 billion per year, relative to its turnover. There is now cross-party commitment for reform of the system, as outlined in party manifestos. The Government in Westminster and the devolved authorities need to give us the reform that was promised.”
Steve Double MP, Chair, All Party Parliamentary Group for Hospitality, added: “The health of the high street is a cross-party concern and for too long the issue of business rates reform has been ignored. The hospitality sector is incredibly important to the UK’s economy; it accounts for £39 billion each year in total tax receipts and is the third largest employer, providing jobs for over 3.2 million people across every region of the country. Given this, it’s vital that the needs of the sector are properly addressed.
“Our report offers some evidence-based recommendations on the way forward. With cross-party attention focused on business rates, there is hope that reform will be forthcoming to reduce the burden that the hospitality sector faces. This needs to be both short-term – in the form of reliefs, and long-term - by rebalancing taxation towards the digital economy.”
For more information on the All Party Parliamentary Group for Hospitality, and to download a copy of the report, visit https://www.ukhospitality.org.uk/page/APPG