How business rates increase could hit fish and chip shops hard

The NFFF welcomes calls for an extension to the rates relief scheme but warns that this only helps around 50% of its members. NFFF President Andrew Crook commented that “Whilst an extension in the business rate relief scheme would be welcomed, we still think there needs to be a full overhaul of the way an outdated taxation system is applied to the sector. With higher input costs, energy and labour costs the tax burden is too great for many businesses. We think this would implore Government to engage with the independent hospitality sector to develop a strategy for the future. We need a long term plan to guarantee a secure future for the tens of thousands of independent hospitality businesses in the UK.”

The survey, conducted by four trade bodies representing the hospitality sector, found that 38% of operators would not be profitable without further support from the Government. The current relief scheme, which gives eligible businesses a 75% discount on their business rates bills up to a cap of £110,000 per business, is due to end on 31 March 2024.

In addition, business rates are expected to rise by more than 6% in April 2024, following the headline rate of inflation in September 2023. This could add thousands of pounds to the annual bills of our shops, which are already struggling with rising costs of ingredients, energy, wages and rent.

The survey also revealed that consumer spending habits have changed, with 72% of operators reporting a decrease in the number of drinks purchased by customers. More than half (55%) of operators said they had not increased their menu prices by as much as their own costs had risen.

UKHospitality and other trade bodies have urged the Chancellor to announce an extension of the relief scheme and a freeze of the multiplier in the Autumn Statement on 22 November.

They warned that without such measures, many hospitality venues would have to cut staff levels, reduce investment and pass on the costs to customers or even close down.

A joint spokesperson for the trade bodies said: “Reducing investment and cutting staffing levels are the last thing venues want to do. In fact, they want to do the opposite, but their hands will be tied if rates increase to such an extent in April.”

They added: “Our economy cannot grow if hospitality cannot grow. The Government must act immediately to underpin this growth and ensure our pubs and hospitality venues survive.”