Premier Inn owner Whitbread set for up to £60m Budget boost

Premier Inn owner Whitbread has said support measures on business rates announced in the autumn Budget could cut its annual costs by as much as £60 million by 2029.

The group said the Chancellor’s move to freeze property taxes for two years for retail and hospitality firms would have a “significant” positive financial impact.

Its total business rates bill will now increase by between £7.5 million and £12.5 million in 2027-28, against previous forecasts for around £35 million, and rise by a similar amount the following year.

This means rates payments will be between £45 million and £60 million lower by 2028-29 than previously expected.

It comes after the Government also raised the national minimum wage by 3.9%, but opted against a larger increase for younger workers in light of the rising number of unemployed under 21-year-olds due to labour costs.

Dominic Paul, Whitbread chief executive, said: “The business rate measures announced in the UK Budget will do much to mitigate the damaging impact of the past two budgets on the hospitality sector, and we are grateful that the Government has listened to our concerns.

“Limiting the increase in business rates over the next two years to inflation, together with a more reasonable increase in the national living wage and national minimum wage, will make a significant difference to our business.”

Chancellor John Healey used his inaugural Budget to give further support for Britain’s embattled high streets, with plans to pay for it by hitting gambling firms with more tax hikes and launching an online sales tax crackdown.

He increased the threshold for 100% small business rates relief for retail and hospitality firms from £12,000 to £18,000, with tapered relief from £21,000, up from £15,000.

Elsewhere across the retail and hospitality sector, real-terms business rates bills will also now be frozen for qualifying properties in England in 2027‑28 and 2028‑29.

Gambling firms will see duty on machine games with stakes over £1 rise from 20% to 25% from April next year to help pay for support measures.

But the duty hike is far less than first feared, with speculation ahead of the Budget that the tax could be doubled.

Mecca Bingo owner Rank said on Thursday the tax hike would cost it around an extra £9 million a year, with a hit of about £2 million in the current financial year to June 2027.

On Wednesday, Ladbrokes and Coral owner Entain criticised the machine games hit as “another disappointing decision” and cautioned it would see it fork out an extra £25 million a year.

It comes on top of increases to gambling taxes at last November’s budget.

Investors in gambling firms were initially relieved the tax hikes did not go further, with shares in the sector rising sharply on Wednesday, but stocks gave back some of the gains on Thursday as the cost implications became clearer.