Recent analysis from UKHospitality and the British Retail Consortium (BRC) reveals that the hospitality and retail sectors together contribute over one-third of all business rates in the UK, despite only accounting for 9% of the economy.
In the financial year 2023/24, these sectors combined paid nearly £9 billion in business rates, highlighting a significant disparity in the current taxation system
With relief measures set to end soon, experts warn that the total bill could rise to £11 billion, representing a staggering 44% of the total rates
Both organisations are calling on the Chancellor to establish a fairer business rates structure in the upcoming Budget, a sentiment echoed in Labour’s recent manifesto pledge.
“Consumers want diverse and thriving high streets, but this is held back by the broken business rates system,” said Helen Dickinson, Chief Executive of the BRC
She emphasised that the existing system creates barriers to local investment and the establishment of new businesses.
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By GlobalData
The impact on jobs and investment
A lower business rate for hospitality and retail, sectors that collectively employ around six million people, is seen as crucial for revitalising high streets.
Kate Nicholls, Chief Executive of UKHospitality, stated, “High Street businesses paying one third of all business rates is absurd,” pointing out that the inflated rates make running establishments like pubs and restaurants increasingly costly
The need for reform is urgent; many businesses are struggling to cope with soaring operational costs, and without changes to the rates, closures may become inevitable.
“Introducing a reduced level of business rates for the high street at the Budget can unlock millions in investment—from new venues to more jobs,” Nicholls added.
A call for fairness and stability
Both Dickinson and Nicholls stress the importance of this issue not only for the sectors involved but for local communities reliant on diverse offerings in their high streets.
They argue that addressing this imbalance is essential for ensuring the survival of shops, restaurants, and pubs, which contribute significantly to the social fabric of communities across the UK
As the 2024 Budget approaches, industry leaders hope to see actionable steps taken to alleviate the financial pressures stemming from business rates.
“This is a great opportunity to right this imbalance, ensuring that retail pays a fairer level of business rates,” Dickinson stated, highlighting the potential for positive change.
