Welsh Government’s draft Budget extends business rates relief, but long-term reform urged
The Welsh Government’s draft Budget for 2024-25 has extended 40% business rates relief for hospitality and leisure businesses and capped the business rates multiplier increase at 1%, providing a lifeline to a sector facing rising costs.
The announcement was welcomed by UKHospitality Cymru, which had warned of severe competitive disadvantages if the relief had not been maintained.
Both England and Scotland are set to continue their 40% business rates relief schemes from next April, and the decision avoids what could have been a significant financial blow to Welsh businesses.
David Chapman, Executive Director of UKHospitality Cymru, said: “Continuing 40% business rates relief for hospitality businesses was absolutely critical, and I’m delighted that the Welsh Government has listened to and acted on our calls for an extension.”
“Rates relief will continue to be a lifeline for many Welsh hospitality businesses, particularly as venues have to pay significantly increased employer taxes from April.” He said.
The hospitality sector employs approximately 123,000 people in Wales, representing 9.1% of the nation’s workforce and a vital part of the Welsh economy.
Without the relief, UKHospitality Cymru estimated businesses would have faced stark increases in rates bills, leaving Welsh venues at a disadvantage.
A local pub, for instance, would have seen its rates rise by £5,000, while a town-centre restaurant would have faced an £11,700 increase.
Support for pubs but calls for reform
Emma McClarkin, CEO of the Welsh Beer and Pub Association, also welcomed the relief, describing it as essential for pubs across the country.
“This relief, which amounts to £4.3 million, should bring pubs across Wales a much-needed sigh of relief and confidence to keep investing,” she said.
However, Ms McClarkin emphasised the need for wider reform.
“It is concerning that there is no mention of wider rates reform in the draft Budget. We continue to call for [the Welsh Government] to commit to meaningful long-term reform which will allow pubs in Wales to carry on pouring hundreds of millions of pounds into the economy and supporting tens of thousands of jobs.”
Hospitality’s vital role in Wales
Mr Chapman highlighted the importance of working with the Welsh Government to foster growth, saying: “These measures are recognition of the role hospitality plays serving Wales and creating places where people want to live, work and invest. I hope we can continue to work with the Welsh Government to create the conditions that allow our businesses to fulfil their ambitions to drive economic growth and create more jobs.”
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