Trump Tariff Fears May Have Shelved UK Business Rates Shake-Up, Report Claims

The UK's Labour government shelved a potential business rates shake-up that could have benefited hotels but potentially harmed online retailers like Amazon, according to claims that cite fears of upsetting Donald Trump. The Treasury has declined to comment on the speculation.

UK Hospitality, an industry group, stated that while the government has promised support for hotels in the upcoming budget, similar to a business rates discount previously offered to pubs, officials expressed reservations about implementing broader reforms. According to chairman Allen Simpson, the Treasury indicated that a business rates adjustment to fund support for hotels might necessitate increased taxes on Amazon warehouses.

Simpson noted that the government's concern was that such a move could provoke a retaliatory tariff from then-President Trump, creating significant challenges. UK Hospitality clarified that they had not been informed of Amazon lobbying against rate increases or referencing the US President in discussions.

Hotels have been particularly impacted by rising business rates, with bills reportedly more than doubling over a three-year period. While there are plans to introduce business rate reductions for small high street businesses by exempting approximately 75,000 small properties from paying rates, this is intended to be funded by a tax crackdown on online retailers. Amazon has reportedly welcomed this specific move, which would make online platforms responsible for collecting taxes from third-party retailers operating through their marketplaces.

UK Hospitality is urging ministers to extend support to hotels, many of which face higher business rates multipliers due to the larger size of their properties. Simpson suggested that a reduction in the Value Added Tax (VAT) for the hospitality sector, from 20% to 10%, would be a simpler and more impactful measure.

Simpson also indicated that the Chancellor had shown sympathy for the sector's challenges during a recent meeting, acknowledging the significant difficulties faced by the high street and the hospitality industry in recent years.