UKHospitality has welcomed the new business rates relief fund and extra targeted support for businesses which, the trade body says, should benefit hospitality supply chain businesses.
Yesterday (Thursday March 25) ministers set out plans to provide extra, targeted support package for businesses who have been unable to benefit from the existing £16 billion business rates relief for retail, hospitality and leisure businesses.
Retail, hospitality and leisure businesses have not been paying any rates during the pandemic, as part of a 15 month-long relief which runs to the end of June this year.
The government will provide a £1.5 billion pot across the country that will be distributed according to which sectors have suffered most economically, rather than on the basis of falls in property values, ensuring the support is provided to businesses in England in the “fastest and fairest way possible”.
Rishi Sunak, chancellor of the exchequer said: “Providing this extra support will get cash to businesses who need it most, quickly and fairly.
“By providing more targeted support than the business rates appeals system, our approach will help protect and support jobs in businesses across the country, providing a further boost as we reopen the economy, emerge from this crisis, and build back better.”
UKHospitality warned that thousands of pubs, restaurants, coffee shop, hotels and leisure attractions will be left paying full rates from July.
Kate Nicholls, UKHospitality chief executive said: “This is a positive development for hospitality businesses, specifically those in the supply chain.
“We had been banging the drum for hospitality supply chain businesses, as they have struggled to access reliefs even though many have faced catastrophic drops in sales. It was absolutely critical that they received financial support, to save jobs and businesses and eliminate a threat to the recovery of the sector.
“However, the worrying issue of the rates relief cap could still inhibit the recovery of hospitality businesses. Almost 8,000 businesses employing nearly 350,000 people will be paying full business rates in July. This is going to undermine viability and could prompt cost cutting, site closures and scare away investment. The problem needs addressing.
"Today’s announcement potentially compounds this problem as it prevents these businesses from readjusting their valuations – even where Covid has caused a fundamental shift in their local market, such as in city centres.
“Should the Government delay the lifting of social distancing measures or make it dependent on some criteria being met such as a vaccine passport, this will present another substantial barrier to reopening and viability. It would need to be met with a further extension of the business rates relief for the hospitality sector to mitigate the inevitable damage. Extending the full rates holiday to September now would provide Government and industry with much-needed breathing space”