In recent weeks, a prominent real estate group has warned hospitality sector businesses to brace themselves for potential increases in business rates, after information emerged suggesting that inflation was likely to increase by as much as 2.5 per cent.
Towards the end of August, Altus Group warned hotels and other hospitality sector organisations that even a small increase in inflation could result in a significant hike in business rates – and that this could weigh heavily on many firms’ finances.
Its warnings, which came ahead of the release of September’s Consumer Price Index (CPI) figure, suggested that hotels could potentially face a collective business rates increase of £19.8 million in April 2019.
Meanwhile, it suggested that pubs could face a spike of £18.7 million, while restaurants were at risk of facing increases of up to £12.7 million.
The news comes at a time when Chancellor Philip Hammond is facing calls to freeze business rate rises altogether, amid concerns that many small businesses are struggling to account for increases.
In the 2017 Autumn Budget, Chancellor Philip Hammond announced that business rate revaluations would switch away from the classic Retail Price Index (RPI) model. However, small business groups and other commentators believe that much more needs to be done to alleviate the pressure.
Robert Hayton, of Altus Group, said that he was in favour of Chancellor addressing the issue as a matter of urgency in his next Budget.
“With our high streets engulfed in crisis and Brexit uncertainty hurting manufacturers and the services industries, the Chancellor should be bold within his 2018 Autumn Budget through an unprecedented stimulus by freezing rate rises,” he said.