Pub rates cut a start but no solution
The business rate reduction is a good start, but not a solution to the hospitality sector’s financial struggles, say leading audit, tax and business advisory firm, Blick Rothenberg.
Elisa Sofocli, a partner at the firm, said: “prime minister Andy Burnham’s announcement of a 20% business rates reductions for pubs, clubs and live music venues is welcome, but this measure should be the first step towards broader reform, and not treated as a complete solution.”
She added: “The rates reduction has not been extended to other high street businesses facing many of the same pressures, including cafés, coffee shops, independent restaurants and hotels. Many will be asking why some in the hospitality sector qualify for relief while others continue to shoulder the full burden of business rates.”
Elisa said: “Business rates are one of the few fixed costs businesses have little control over, so any reduction provides valuable breathing space. A typical pub could save around £1,100 a year, but while every saving helps, it is unlikely to offset the sharp increases in wages, Employer National Insurance Contributions and other operating costs.”
She added: “The next question is who ultimately pays. If these measures are funded by higher business rates on warehouses, distribution centres and large out-of-town developments, the Government will need to ensure it isn’t simply shifting the tax burden from one part of the economy to another. Reform should strengthen both our high streets and the supply chains that support them.”
Elisa said: “Today’s announcement feels like another indication of the government’s direction of travel ahead of the Autumn Budget. Targeted tax relief can play an important role in supporting communities, but businesses are looking for something bigger: a business tax system that is simpler, more predictable and gives them the confidence to invest and grow.”