Businesses in Wales have warned that a rise in business rates could lead to an increase in the number of closures in the retail and hospitality industries. The Welsh government’s discount on business rates for these sectors has been reduced since April, with high street traders expected to face larger bills. Executive director of UK Hospitality Cymru, David Chapman, said the rising costs of overheads and a reduction in state support for businesses were leaving many firms “on the edge”. Chapman urged the government to restore the discount to the previous level, which would align it with the discount offered in England.
Shops and restaurants in Bangor, Gwynedd, agreed that the increase in costs was beginning to impact their businesses. Since July, Sophia Ingham, who runs the Phia shop in Deiniol shopping centre, has found her yearly rates increase to be the difference between profit and closure. Ingham said she would have to close up shop in the coming months. “It will be a rate-induced close,” she stated. Ingham argued that the government must cut rates entirely if high streets are to be saved. She expressed confusion as to why states would pass up the rejuvenating earning potential of open high streets.
The Welsh government defended the rates, saying that they continued to provide relief to businesses. A spokesperson noted that only one in five businesses pays the full amount. Business rates are calculated on property value and are to be paid in the form of tax, split by local authorities and deposited into the national fund. The level of relief to which businesses are entitled is determined by the Welsh government. Earlier this year, the amount of relief was cut from 75% to 40% for businesses in the retail and hospitality industries.
Andria Thomas, who runs Dot clothing shop in Carmarthenshire, expressed disapproval of the increase’s perceived unfairness when compared to similar businesses in England. She stated that beyond the bottom line of profit, every extra cost hindered local business profit and success. The Welsh government has noted that it is doing what it can to alleviate pressure on businesses, with non-domestic rates relief for small businesses and further support scheduled for retail, leisure, and hospitality businesses
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