The impact of rising business rates on the hospitality industry is a pressing issue that demands our attention. In this article, we'll delve into the story of Stirrups Hotel, a family-run business facing a potential £150k hike in rates, and explore the broader implications for the sector.
The Stirrups Hotel Story
Jason McKelvie, the director of Stirrups Hotel, a luxury establishment in Maiden's Green, Bracknell, has raised the alarm about the steep increase in business rates. He estimates that over the next three years, the hotel's rates could rise by almost £150,000, a significant burden for a small, independent business.
McKelvie's concerns are not unfounded. The hotel, which has been family-run for 36 years, lacks the resources of larger chain hotels. He believes that smaller players like Stirrups will be hit the hardest by these rate increases.
"It's a huge jump for us," McKelvie said. "Hospitality is a major employer in the UK, yet our industry seems to be unfairly targeted with taxes at the moment."
The hotel is currently appealing the rate hike, but the process is expected to take time due to a backlog in the system. In the meantime, the uncertainty looms large, affecting the hotel's investment plans and forcing them to reduce staffing and seek other cost-cutting measures.
The Broader Impact
Stirrups' plight is not an isolated incident. Cllr Gareth Barnard highlighted the hotel's situation during his state of the borough address, shedding light on the potential consequences for the local community.
When the transitional relief ends in 2029/30, Stirrups could face an additional £7,000 per month in business rates, a "huge hit" according to McKelvie. This increase will significantly impact the hotel's ability to invest and grow, and it's a sentiment shared by many in the hospitality industry.
"We've had multiple hits post-Covid, from national insurance to living wage and energy costs," McKelvie explained. "A VAT cut in hospitality, similar to the European average, would provide much-needed relief and encourage investment."
Government Response
The Treasury has acknowledged the need to support the high street and has implemented a £4.3 billion support package to limit bill rises. They've capped Corporation Tax at 25% and cut the business rate tax rate for many retail, hospitality, and leisure properties.
However, as McKelvie points out, these measures may not be enough to offset the challenges faced by smaller businesses. The rate increases, if left unchecked, could "sink a lot of people," he warns.
A Call for Action
The story of Stirrups Hotel serves as a reminder of the delicate balance between supporting local businesses and ensuring their long-term viability. While the government's efforts are commendable, more needs to be done to address the unique challenges faced by the hospitality industry.
In my opinion, a comprehensive review of the business rate system, especially for small, independent businesses, is long overdue. We must find ways to support these establishments, not only for their economic contribution but also for the vital role they play in our communities.
The impact of rising business rates is a complex issue, and it's one that requires thoughtful consideration and action. As we navigate these challenges, let's remember the importance of supporting our local businesses and the positive impact they have on our communities.
