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Hospitality at Heart of Communities in New High Street Report

UKHospitality has applauded recommendations in a report by the Housing, Communities and Local Government Select Committee following its inquiry into High Streets and Town Centres.

The report identifies the UK’s hospitality sector as crucial to the health and success of future town centres and makes a number of recommendations to reform business rates, as suggested by UKHospitality CEO Kate Nicholls, in her oral evidence session to the inquiry.

These include:

  • Introducing an online sales tax, the receipts of which would offset business rates bills

  • A ‘holiday’ for high street retailers from rates increases which result from investments to improvements in property

  • A reduction in business rates for retailers in high streets and town centres, which would have the additional effect of balancing competition from out-of-town shopping centres.

Further proposals regarding planning and central and local Government support for the UK’s high streets combine to set a positive vision for an evolved and sustainable high street long into the future, providing the services that communities want and need.

UKHospitality Chief Executive Kate Nicholls said: “Hospitality businesses lie at the heart of communities across the UK and play pivotal economic and social roles on UK high streets. The report gives due recognition to how crucial the sector is to the high street of the future, as they move away from the shopping-focus of the past. Policies to drive growth and regenerate high streets must have hospitality at their core and this needs to be recognised by the Government and local authorities.

“In the absence of the Government’s promised full of review of business rates, this represents the most radical assessment of the state of the rates regime. This is a great starting point for opening up the conversation and beginning to address an issue that has crippled many high street businesses, not least in hospitality.

“Property tax is the chief cause of the decline of the high street and a reduction in the tax burden would be very welcome. Supplementing rates with an online sales tax, something UKHospitality has pushed for, would provide a significant boost and the Government needs to consider this in the design of the Digital Services Tax. That tax will need to cover areas such as financial and professional services that have moved away from the high street in recent years. A new sales tax or increase in VAT for retail and hospitality would need to be pitched significantly lower than the current business rates charge to be helpful.

“Many businesses are also penalised by a rates hike having made a significant financial investment into their property. A tax holiday would be a good way to remove this disincentive to invest, although the 12-month limit is not long enough.”

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