UK Government Consults on Business Rates Reform for Hospitality Sector

In Brief: The UK Government is consulting on proposals to improve business rates for hospitality businesses by enforcing VAT collection rules for online marketplaces and directing any resulting revenue toward the business rates system for high street businesses.

Kate Nicholls, Chair of UKHospitality – Image Credit UKHospitality

The UK Government has launched a consultation on plans to more effectively enforce VAT collection rules for online marketplaces, with a commitment that any revenue raised will be used to improve the business rates system for pubs, restaurants, hotels, and other high street businesses.

Hotels and restaurants experienced significant increases in business rates following the most recent revaluation, with hotels seeing a three-year increase of 115% and restaurants 54%. The consultation aims to address concerns that hospitality businesses have been disproportionately affected by the current business rates system.

UKHospitality has expressed support for the proposals, stating that additional revenue from improved VAT enforcement should be used to lower business rates for the hospitality businesses most affected. The organization has highlighted the need for concrete action to address the impact of business rates on the sector and referenced ongoing engagement with the Government since the Budget.

The consultation seeks input on how to implement these changes and direct revenue toward affected sectors, including hotels, restaurants, pubs, and cafes. The Government has not specified a timeline for implementing any changes to the business rates system.