'Cutting rates relief will cost us thousands'

Changes to businesses rates will cost a family firm about £18,000 a year, it said.

Stuart Philips, a managing partner of a pub, restaurant and wedding venue in Shropshire, said the reduction in a relief for hospitality industries, announced in the recent budget, would increase his costs.

Chancellor Rachel Reeves said a 75% relief on business rates, charged on most non-domestic properties, would continue at a lower rate of 40%.

She said the support announced in her statement would save small businesses about £1.9bn in 2025/26. Difficult decisions had to be made to plug a £22bn "black hole" in the nation's finances, she said.

Mr Philips employs about 40 staff at The Hundred House in Norton.

"We're a bit bigger than the average pub, so the reduction in relief will increase our costs by about £18,000.

"That's a lot of steak and kidney pies to sell to cover that.

"I don't want to change the way we do things, we make everything from scratch, and that craft and labour costs money in hours, so I've told my chefs to enter the kitchen like a bull at the gate, to pick up a knife and get producing."

Mr Philips also raised concern about National Insurance contributions increasing and a 6.7% rise in the national minimum wage.

"They could have just totally pulled the relief completely, which they haven't, but it's still a massive increase in costs," said Neil Taylor who runs The Fox at Shipley, near Wolverhampton.

"In black and white, it's going to cost us a further £14,000 in the next financial year.

"We don't want to rise the price of food and drink, but these things have got to be done to keep the business sustainable.

"Because the pub's rateable value is so high, we weren't eligible for most of the grants during covid, so I had to borrow money to keep the business going, and I've still got 18 months left of repayment," he added.

Dan Thomas, the licencee of The Bridge Inn in Newport, Shropshire, is reopening the pub this weekend under new management.

Mr Thomas, along with two friends, already runs a pub in Nantwich, Cheshire.

"Our Nantwich pub is a larger site and there will be a huge impact on the rates there, and the pub will struggle.

"But the Bridge Inn is only just over the threshold so the business rates aren't so huge, so it'll have minimal impact," he said.

The Labour government has said its long-term plan is to transform business rates over the next five years to deliver a fairer system that protects high street businesses competing with online retailers.

The chancellor has said the government intends to introduce permanently lower business rates for properties in the retail, hospitality and leisure sectors from 2026/27.

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