Countryside hotels beg Chancellor for relief from Iranian fuel price shock
Hotels and other hospitality businesses in some of the most scenic areas in Britain are pleading with ministers to cut taxes and green levies to save them from bankruptcy after they were hit by a surge in the cost of fuel oil.Trade body UK Hospitality has written to Chancellor Rachel Reeves calling for a halving of VAT rates affecting the sector to 10 per cent, and for a planned tourist tax on visitors to be scrapped to revive the battered sector.Meanwhile, business owners in remote locations – also hit by a surge in the price of bottled gas following the outbreak of the Iran war – are urging ministers to scrap green levies on fossil fuels to bring down their bills.Hotelier Charles Bowman, who uses oil and liquefied petroleum gas (LPG) to power his Grade II-listed premises in the Forest of Bowland, Lancashire, told The Mail on Sunday the extra costs 'could mean the difference between survival and not for some businesses.''The Government could help us with these price rises, rather than benefiting through extra VAT. They should also take the [green] levies off,' he said. 'Stranglehold': Hoteliers Charles and Louise Bowman run Grade II-listed premises in the Forest of Bowland, LancashireBowman and his wife Louise, who employ 98 people at the 25-bedroom Inn At Whitewell, called the costs 'a stranglehold', adding that they had been forced to absorb many of the extra taxes to avoid raising room rates and meal prices in a bid to keep attracting customers.The building has also been refused permission to install solar panels, is in a valley unsuitable for a wind turbine, and does not have an electricity connection powerful enough for heat pumps. As a result, the hotel is entirely reliant on oil and gas for power.The Iran war has sent heating oil prices rocketing from 65p a litre in January to as much as £1.30 a litre in early March, before falling back to about 90p. Bowman said his LPG costs had also risen sharply since the beginning of the year, even before the Iran war. This is supported by data that shows refill charges for 47kg industrial-size butane canisters rose from about £95 to £126 between December and March, a 26 per cent rise, though prices in some areas have since fallen back to below £100 this month.Margaret Major, managing editor of the Fuel Oil News trade publication, said that while only 7 per cent of UK businesses use bottled gas, this increased to 17 per cent in rural counties, meaning firms in remote areas were much more exposed.'It will be the rural small and medium businesses which are hardest hit by these price increases,' she added. As supply costs have mushroomed, so too has the Government's 20 per cent VAT take for both fuel types, which is passed on to customers.The climate change levy is also added to the cost of each litre of LPG, while fuel duty has to be paid on heating oil.Sarah Chapman-Hughes, who runs the 11-bedroom Mortal Man hotel at Troutbeck in the Lake District, said she is making 'zero' profit and called for green taxes on her LPG bills to be scrapped, branding the climate change levy a 'joke'.'Can anyone in Government say they care about the climate? Probably not, otherwise they would have got on with developing different sources of power,' she said.The hotelier, who expects LPG costs to soar to £3,500 a month from the autumn, said: 'We don't have a choice because of where we are located.'Gary Shorrock, who runs The Old Post Office tearoom in Troutbeck with his wife Jane, said rural hospitality businesses were being 'unfairly targeted' simply because of where they were based.'We use fuel oil, which averaged 65p a litre then went up to £1.31 when the war started before falling back. But the Government should have acted immediately to reduce VAT,' he said.'For small businesses in hospitality, it's very difficult. We have two full-time and two part-time staff but my wife has been working 14-hour days.'Allen Simpson, chief executive of UK Hospitality, said in a letter to the Chancellor last week the sector was facing 'extreme cost pressures and is fragile', calling on Rachel Reeves to intervene and 'reduce the risk that viable businesses are lost'.The industry body has called for 'targeted support', including the VAT cut, extending business rate discounts given to pubs to the rest of the sector, and relief on 'non-commodity' charges on energy bills.A Treasury spokesman said: 'We have the right economic plan – we're reforming business rates to back hospitality, with a £4.3 billion support package to limit bill rises, alongside capping corporation tax at 25 per cent, cutting red tape and taking action on the cost of living to boost the sector.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
