Expert Insight
NEWS from
Kate Nicholls UKHospitality Chief Executive
Rent, rates and VAT are our hat-trick of hope for this industry’s full recovery, post-Covid – but only if they’re overhauled and form part of a suite of support.
Because right now, they undoubtedly pose a potentially punitive triple threat. At the time of writing, rent demands, business rates and an increase in VAT will become a reality next April just as the sector comes out of what is traditionally its quietest period of trading in the year.
That’s why we’re calling for a targeted package of post-pandemic support for the sector and have asked the Government to introduce three key measures:
• Meaningful reform to the business rates system, including a differential, lower rate for hospitality, coming into force in April 2022.
• A strong, equitable code of practice that mandates a sharing of the pain of rent arrears between landlords and closed sectors, including a 50% rent debt write-off for tenants for all closed periods.
• A permanent 12.5% VAT rate for hospitality and tourism.
Together, and combined with other measures that we are urging the Government to introduce, these would help lift some of the weight from
the sector’s shoulders, enabling it to recover faster and contribute more to the country’s economic growth.
Much of that weight at the moment is the £2.5bn rent debt accrued by hospitality businesses during the pandemic, while the business rates system remains, frankly, unfair. Not only does it require our industry to overpay by 300% relative to its turnover, the cap on business rates, announced in the last budget, penalises even small operators, as no business can claim more than £110,000.
As for VAT, retaining the current 12.5% rate for hospitality and tourism would ensure the UK remains competitive in a global market, provide consumers with continued affordable prices, and create 125,000 new jobs. It’s why UKHospitality’s #VATsEnough campaign was launched, urging the Government not to return the VAT rate to 20% next April. Addressing this,
the Government would be taking the most effective step yet to secure a more rapid, long term and sustainable recovery for hospitality.
Easing rent, business rates and VAT worries for thousands of hospitality businesses would go a very long way to helping them on the road to recovery, and at the same time would allow operators to turn their attention to other pressing concerns confronting them at the moment, notably staff shortages and supply chain issues.
Having battled their way through a global pandemic, it would be a crying shame to see thousands of hospitality businesses succumb to a perfect storm of rent demands, unfair business rates and VAT increases. We appreciate that the Government has done much to help our sector survive Covid-19, but it must now do more on three crucial fronts if the industry is to thrive.
6
November 2021
www.venue-insight.com
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