‘We’re all dreading April’ say pubs and salons ahead of business rates rise

Hospitality firms and salon owners have said they are being “overloaded with extra costs” ahead of a rise in business rates in April.

In Wednesday’s spring statement, Chancellor Rachel Reeves made no change to a pencilled jump in how much firms will pay in rates.

Rox Marjoram, who co-owns five pubs and a restaurant in Suffolk, told the PA news agency her rates bill is set to skyrocket from £33,000 a year to £80,000 a year.

“We’re all dreading April this year. That’s such a shame,” she said.

“We’re being squeezed and squeezed, and that’s going to make things really difficult… Doors will close across the country.”

The tax, which applies for businesses operating out of physical premises, was previously cushioned during the pandemic, but a 75% relief will fall to 40% in April.

The Government has said it will reform the current business rates system, and on Wednesday said it will publish an interim report on this during the summer.

But no details of the proposed changes are set to be announced until the next autumn Budget later this year.

Ms Marjoram said she is “pleased” about proposals for rates reform, but that until that happens it is just another rising tax for small business owners.

The high street is going to be a bloodbath for the next six months

It comes on top of an increase in company National Insurance Contributions (NICs) which is also set to take effect next month, as well as a rise in the minimum wage.

On Labour’s promises to grow the economy, Ms Marjoram said: “I don’t think anyone in hospitality feels like there’s much hope for growth at the moment… We’re being overloaded with extra costs.”

Meanwhile, salon owner Toby Dicker said the sector faces a “staggering” tax bill from April, with the rates increase combined with other measures set to disproportionately harm small businesses.

For his own business of five salons in the South East, the rates bill is set to go up by about 2.4 times what it was before to £50,000, he told PA.

“The high street is going to be a bloodbath for the next six months,” he said.

He added that the Government promising to permanently reduce rates is “patently ludicrous” when the tax bill is set to rise.

Mr Dicker, who is the founder of industry group the Salon Employers Association, has also campaigned to reduce VAT on labour costs from 20% to 10% in the spring statement.

The British Hair Consortium (BHC) recently said the tax disproportionately hits salons, because the work they do is labour intensive compared to selling products.

As a result, they have less opportunity to claim back the costs.

A report earlier in March said the industry faces a 93% employment decline by 2030 without reform, and that there would be no new apprenticeships by 2027.

Ms Reeves made no changes to the VAT on labour costs in the statement.

Mr Dicker said the industry is being “destroyed” by the tax, and said the Government needs to “level the playing field” to stop a wave of salon closures.