Hospitality sector at threat of overpaying business rates by £10bn come 2025, warns ALMR

02/02/2018 - 07:00
The Association of Licensed Multiple Retailers (ALMR) has warned that without government action to overhaul business taxation, hospitality operators stand to overpay business rates by £10 billion come 2025.

In its submission to the Government’s consultation on corporate tax and the digital economy, the trade body called for a radical rethink on taxation and the establishment of a system that is more equitable and does not “unreasonably favour digital businesses”.

ALMR chief executive, Kate Nicholls, said: “The current system is archaic, completely unfit for purpose and sees hospitality businesses shouldering the burden as high streets are slowly strangled.

“The Government needs to act on its manifesto promise of root and branch reform otherwise businesses will be waiting until 2025 before they see any change, by which time it will be too late for many.

“The influential Treasury Select Committee rightly pointed out that business rates damage the competitiveness of shops on the high street relative to large out-of-town distributors and online retailers.

“This is an issue we raised with the Committee and senior MPs back our stance on this issue and understand that this taxation imbalance between high street businesses compared to those based online or in retail parks needs to be addressed otherwise high streets will be forced to fight an uphill battle against a system that is rigged against them.”

The ALMR's feelings were echoed by fellow industry body, the British Beer and Pub Association (BBPA), which said that roughly £1 of every £3 (34%) made in the pub goes to the taxman, while well-known digital companies continue to pay "only a fraction of this on their UK earnings".

"EBay paid £1.6 million on its declared UK turnover of £200 million whilst a medium sized brewer paid £7 million on its turnover of £18 million in beer duty, a difference of nearly four and half times as much," said the BBPA.

The ALMR is set to enter into a new trade body merger with the British Hospitality Association (BHA) later this year after a move to unite the two organisations under the name UKHospitality was announced last month.

The rise in business rates is one of the issues it is looking to address.

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