SMEs will pay an extra £8.2 billion as a result of the business rates increase which came into place on 1 April. Adding to this, the national living wage has also increased this week by 4.4 per cent, from £7.50 per hour to £7.83 per hour.
The increases will put added pressure on London businesses which, according to the Federation of Small Businesses (FSB), will now foot 33.1 per cent of the UK’s total business rates bill.
The hospitality sector in London, which is already struggling due to a significant decline in like-for-like sales in the past year, will be further impacted by these rising costs, and many bars, pubs and restaurants will be forced to close or move out of the city as they will no longer be able to afford their current premises.
Sue Terpilowski, London policy chair at the FSB, is calling on government to conduct a major review of the business rates system.
“Many small businesses in London [saw] their business rates increase upwards of 20 per cent on 1 April,” she said.
“The high cost of doing business is putting additional pressure on wages and inflation for London businesses. The cost of employing staff generally and the heavy burden of cripplingly high commercial space costs is having additional negative impacts on small businesses.”
At Beavis Morgan, we have extensive experience of working with clients in the hospitality sector and our professionals are acknowledged experts in issues affecting pubs, bars and restaurants.
Through our partner businesses, BM Structured Finance and BM Advisory, we are able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.