Stamp duty reform will cost licensees an extra £11m a year, says BBPA

Licensees will be forced to pay out an extra £11m a year in stamp duty under new government proposals, says the British Beer & Pub Association (BBPA).

The government confirmed yesterday that it will be introducing a new land tax in December. This will see licensees charged duty based on the length of their lease rather than one year's average rent.

The result is that the new reform will cost licensees thousands of pounds in additional costs and discourage people from entering the trade. It could also affect the major tenanted pub companies who would be forced to increase the price of their leases to cover the extra charge.

Under the current stamp duty system the trade pays approximately £3m to the government but from next year this is expected to increase to £14m.

Mark Hastings, spokesman for the BBPA, said: "We are enormously disappointed at the government's latest announcement on stamp duty. The government established an elaborate consultation process but they have totally failed to listen to the legitimate concerns of pubs and small businesses.

"This represents a huge tax hike which will cost the industry an extra £11m a year and this will largely be paid by licensees."

Under the new legislation, which will become law though the new Finance Act the first £150,000 of all leases will be exempt - the government claims this will exempt 60 per cent of retailers from all the tax.

But the BBPA disagrees. "The government will fail to deliver on its promise that 60 per cent of properties will be exempt. All evidence is that only 35 per cent of pubs will be," Mr Hastings added.

A survey in July of 125 retailers and 10,000 outlets by the British Retail Consortium (BRC) revealed that only 29 per cent would be exempt.

Bill Moyes, director general of the BRC, said: "This is terrible news for retailers many of whom will still be facing up to eight-fold increases on their stamp duty bill.

"There is also little comfort for small retailers and business start-ups due the upfront nature of the tax.

"We are very disappointed that the Chancellor did not seize the opportunity to simplify the process and give real assistance to already squeezed small and medium-sized retailers.

"The measures announced are totally contrary his own stated aims of promoting entrepreneurship and business expansion."

• Click here​ to view figures from the BBPA of the tax rates that will apply to a range of rental values.

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