The UK Government is being urged to extend its £4.3 billion business rate relief fund, currently aiding pubs, to include hotels. According to Blick Rothenberg, a leading audit, tax, and business advisory firm, hotels are grappling with significant tax increases and rising operational costs. Darsh Shah, a partner at the firm, highlighted that some hotels are experiencing a 300% increase in rateable values this year, compounded by hikes in National Insurance Contributions and the National Minimum Wage.
The proposed extension of the relief fund would allow hotels to phase in business rate increases over three years, alleviating some financial pressure. Shah also noted that English mayors now have the authority to introduce a tourist tax on hotel stays, which could further strain hotel finances if guests resist the additional cost. However, he suggested that if a portion of the levy supports hotels with rising costs, it could be beneficial.
Frazer Callingham, Managing Director of Starboard Hotels, echoed these concerns, stating that the hospitality sector, severely impacted by COVID-19, continues to face unfair cost burdens. He pointed out that employment costs and supplier prices have surged, leaving hotels with limited options to pass on these costs to consumers.
Shah emphasised the need for the Government to reconsider the current rate discount, which has been reduced from 75% during the pandemic to 40% this year, and is set to end in April 2026. He urged for a more gradual phase-out and additional support to help hotels manage the business rate rise.
```
