Hospitality Sector Dealt Bitter Blow As Outdated Rating Model Drives Significant Rates Increases

Hospitality Sector Dealt Bitter Blow As Outdated Rating Model Drives Significant Rates Increases

07 January 2020

Hospitality Ulster calls on Government to fix broken rates model before it is too late.

Hospitality Ulster has claimed that the hospitality sector has been dealt a significant blow after the publication of the Draft List of Values in the Non-Domestic Rates revaluation by the Land and Property Services which shows an expected sharp hike in rates for many businesses in the sector.

 

The representative body has said that the current rating system which is used to calculate the rates for pubs and hotels is “broken” and “not fit for purpose”.

 

The challenge by Hospitality Ulster to fix the antiquated system is due to the fact that the rating system is based on a ‘receipts and expenditure model’, which is calculated from turnover - unlike other non-domestic rates calculations, which are based on actual rental value.

 

The rating model is effectively another income tax, with success penalised and lack of profitability being ignored.

 

Business rates are crippling the Northern Ireland hospitality sector which is paying some of the highest rates in the UK with little in the way of rates relief schemes experienced by counterparts in Great Britain.

 

Hospitality Ulster has written to all its members to urgently check their new valuations on the LPS website as soon as possible as the delay in publication due to the General Election has resulted in a considerably reduced period for informally challenging the valuation.

 

Colin Neill, Chief Executive, Hospitality Ulster reacted:

 

“Our antiquated rating system needs radical change and is a major burden for our members. It is not only curtailing growth and dampening any ambition, it is actually impacting the very sustainability of many businesses in the sector.”

 

“It beggars belief that by 2020 this outdated system still hasn’t been addressed despite the repeated calls to change the process which is completely out of kilter with reality.”

 

“How can we on one hand be the sector which is celebrated on a global scale and contributes £1.2billion to the local economy, and on the other be taxed through rates to the point that we can no longer grow or invest. How can the plan to increase tourist spend be a Programme for Government target, whilst at the same time forcing some to assess their future in the hospitality sector.”

 

“The outworking of this defective model is that in many cases rates look likely to rise considerably and will be a bitter pill swallow for the many who have dedicated their careers to building some of our best known hospitality businesses. In certain cases it could have a catastrophic and negative impact on some livelihoods.”

 

“Businesses in the hospitality sector should immediately check their new draft valuations on the LPS website and contact us for advice if they feel the increase is unreasonable. Government must act to fix this system and also provide the same level of support enjoyed in England and Wales before it is too late.”

 

The Reval 2020 List can be viewed HERE