The Chancellor has extended business rates relief for the UK’s hospitality sector.
Rachel Reeves announced a 40% business rates relief for the industry, down from the current 75% rate, which was set to expire on 31 March.
The 40% rates relief, up to a cap of £110,000 per business, will be in place through 2026.
The Chancellor said the government would “introduce two permanently lower tax rates for retail, hospitality and leisure properties which make up the backbone of high streets across the country” from 2026 to 2027.
UKHospitality chief executive Kate Nicholls said: “This Budget is the latest blow for hospitality businesses. Rising taxes, increasing costs and fragile consumer confidence risk bringing growth to a grinding halt. “In the short-term, the tsunami of employment costs coming in April will ultimately do more to hamper growth than incentivise it. Increases to employer NICs and wages will make it harder for businesses to support employment and invest in their businesses.
"Avoiding the business rates cliff-edge next April was critical and it was important that some relief has been extended. However, the reduced level of 40% is another cost that businesses have to deal with. For those small- and medium-sized operators, their rates bills will still go up in April. All of this means that 2025 will be painful for hospitality, with an increased annual tax bill of £3 billion for the sector.
"However, there are reasons for longer-term positivity. I am pleased that the chancellor is implementing UKHospitality’s recommendation for a permanently lower level of business rates for hospitality. Levelling the playing field in this way recognises the importance of the high street and the role it plays in our communities and economy."
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