It’s Time to Take Action Against the Business Rates System

Ufi Ibrahim, Chief Executive of the BHA writes exclusively for On-Trade Progress.

The true scale of the chaos in the business rates system faced by hospitality businesses in England has just been revealed by a Freedom of Information request which shows that there are still over 20,000 appeals outstanding from 2010.

The British Hospitality Association (BHA) partnered with business rates specialists Altus to request the Valuation 0ffice to reveal the number – 20,490 hospitality businesses still waiting for results after seven years of anxiety. We were, obviously, aware of the problem but wanted to have the facts in front of us.

And that is not the end of it. This year’s revaluation of commercial properties has led to massive increases, many of which will be challenged – while it is reported that thus far only around £197,000 of the government’s £300million business rates relief fund has been allocated. It is increasingly clear that, through no fault of its own, the Valuation Office is underfunded and overrun.

The recently published Valuation Office Business Plan commits the agency to settling all 2010 Rating List appeals by 31st March 2019 so businesses may have nearly 2 more years for their retrospective appeals to be concluded.

Restaurants and pubs face massive increases, notwithstanding the £1,000 a year rebate given to the pubs in the Budget which works out at just £20 a week. That is not enough to make a difference to businesses having to grapple with increased wages and costs of raw materials.

The government needs to act now before it is too late and so business rates will be a key issue at the BHA’s annual Hospitality and Tourism Day in Parliament on 10 October which gives our members to chance to speak directly to our lawmakers.  Last year’s event was attended by over 150 business owners and 65 MPs and is free to attend for BHA members, so contact us if you would like to take part.

Scotland and Wales are also assessing their rates systems. The independent Barclay Review of Business Rates in Scotland reported in August and recognised the case made by the BHA that the system of valuing hospitality and licensed businesses is flawed and unfair. The BHA Scotland Director Willie Macleod is meeting with Scottish Finance Secretary Derek Mackay to discuss this further and find out what plans the Scottish Government has to extend the relief available (currently capped at 12.5% plus inflation) beyond 31 March next year.

The Welsh Government is currently consulting on a permanent business rates relief scheme for small businesses. Proposals include redirecting rate relief from national chains to smaller cafés, pubs and restaurants. It will also consider bringing in permanent relief for certain industries.

Nationwide our businesses, with large bricks and mortar presences, also face increasing food, beverage costs and labour costs. The BHA will make this clear in our response on behalf of the industry.