UKHospitality has warned the Treasury that it must undertake a full and wide-ranging review of business rates and ringfence future revenue when it investigates the digital taxation system.

The warning follows a statement from the Chancellor, in response to a letter from Chair of the Treasury Committee Rt Hon Nicky Morgan MP, expressing concern about the burden placed on high street businesses.

The Treasury’s response states that the Government intends to scrutinise business rates in the near future.

UKHospitality Chief Executive Kate Nicholls said: “The Government’s acknowledgement that business rates are placing an unfair burden on high streets and the signalling of the intention to reform digital taxation are certainly welcome.

“However, the Government’s apparent stance that the wider system is not in need of reform, or has already been suitably reformed, is completely wrong. The Government has provided some much-needed relief for pubs, and may have made some cursory inquiries with the VOA; but we are still a long way short of the fundamental review and reform of the system that was promised in successive Conservative manifestos.

“The Government needs to push ahead with this review or hospitality businesses in the heart of communities will continue to face a disproportionate burden and we will see further closures. At the minimum, the Government must ensure it ringfences funds generated by a revamped digital tax system to offset the gross burdens being faced by hospitality businesses.”