Deliveroo is today calling on the Government to simplify the business rates regime to help restaurants on the high street struggling with rising bills, after uncovering that tens of thousands of restaurants are facing above-inflation rises.
Around 41,000 restaurants in England paid £744m in business rates this year, with £763m expected to be paid out next year. But as many as 19,000 of those restaurants have seen their business rates bills rise by above inflation this year, according to new research.
The details uncovered by Deliveroo and business rates specialists Gerald Eve found that of those facing inflation-busting rises, some 12,000 are small restaurants with bills rising by up to 10.7%. Some larger restaurants have seen bills rise by as much as 36%, having already seen their rates jump by a staggering 44.8% last year. Next year rates for smaller restaurants could rise by as much as 12.5%, with some larger restaurants seeing increases of over 50%.
In a survey of Deliveroo’s partners, restaurant have told Deliveroo that business rates is currently one of their top three concerns that is holding back the industry. A major issue for small restaurants in particular is the complex appeals process, where restaurant owners can struggle to gather the excessive information required to query their bill.
Even simply registering a single property to start the appeals process can take at least half a day, at which point the Valuation Office Agency can take up to 12 months to agree to investigate. However, restaurants run the risk that any inaccurate information they provide could lead to a £500 fine and a lengthy wait before any decision is made.
Through its partnership perks programme, Deliveroo supports restaurant partners struggling with business rates via specialist business rates advisor Gerald Eve.
Dan Warne, Deliveroo UK and Ireland managing director, said, “Britain's restaurants up and down the country are an integral part of people's daily lives, whether customers are dining in or ordering out. They contribute to the lifeblood of our communities, create thousands of jobs and Deliveroo is proud that our growth means more business for them.
“But too many restaurants - from national chains to independent stores - tell us they are struggling with sky high business rates that are increasingly complex. Deliveroo already works with our restaurant partners to understand the support available but action is needed to protect this vital sector and the jobs it supports.”
Jerry Schurder, head of business rates at Gerald Eve, said, “The difficulties faced by many restaurants nationwide highlight not only the extent to which the business rates burden has for many become unbearably high, but also the manifold unfairness baked into the system.
“The complexity of the appeals process is just one area that is disproportionately hitting independent restaurants – who lack the expertise and resources to effectively navigate the system. We call on the Government to urgently review how it can make the rates burden more affordable, and adjust the system to make it fairer for all occupiers.
“Restaurants are currently paying business rates based on how they were trading more than three years ago, and this will continue until the next revaluation in 2021. The Government needs to bring the rates system into the 21st century and make bills reflect more recent economic conditions – through more frequent revaluations and shorter delays between valuation and billing – as is common throughout many countries worldwide.”
While the industry face rising costs, Deliveroo has been helping its restaurant partners grow and increase their sales. A recent independent report by Capital Economics found that Deliveroo has helped create 7,200 jobs across the restaurant sector, increasing revenues to restaurants and their supply chain by £460m in 2017 alone.
Restaurants are also offered support with discounts on job advertisements through recruitment firms, business rates advice, cut price wifi and reductions on their energy bills.