The hospitality sector is facing a crisis as a result of the recent business rate hike, with one hotel owner warning that the increase could 'sink' his business and others in the industry. The director of Stirrups Hotel, Jason McKelvie, is facing a staggering £150,000 annual rate hike over the next three years, following the changes announced in the October Budget. This is a significant blow to the small, family-run hotel, which employs 29 full-time, 6 part-time, and numerous casual workers. The hotel's plight has been highlighted by Cllr Gareth Barnard during his state of the borough address to Bracknell Forest Council on 13 May. The hotel is currently receiving transitional relief, but when this ends in 2029/30, the business could face an additional £7,000 per month in business rates over a 10-month period compared to what it paid last year. This is a huge hit for the hotel, which is already struggling with multiple other cost increases post-Covid, including national insurance, living wage, and energy costs. McKelvie argues that the industry has been unduly targeted on taxes and calls for a VAT cut in hospitality to 10-12%, similar to the European average. This would provide the necessary confidence to continue investing and growing as a business and an industry. The Treasury has responded by announcing a £4.3bn support package to limit bill rises and cap Corporation Tax at 25%. However, this may not be enough to alleviate the concerns of small businesses like Stirrups Hotel. The Treasury's plan includes cutting the business rate tax rate for over 750,000 retail, hospitality, and leisure properties by 5p, funded by higher rates on the top 1% most expensive properties, including many big online warehouses. As a result, warehouses used by online giants pay a 33% higher tax rate than small high street properties. This raises a deeper question about the fairness of the tax system and its impact on local communities. The hotel owner's plea highlights the urgent need for a more equitable tax structure that supports small businesses and the local economy. The hospitality sector is a significant employer in the UK, and the current tax burden is causing a negative impact on the industry as a whole. The government's response is a step in the right direction, but it may not be sufficient to address the challenges faced by small businesses like Stirrups Hotel. The industry desperately needs a VAT cut to 10-12% to ensure its survival and growth. This is a critical issue that requires further attention and action from policymakers to support the hospitality sector and the local community.
