Licensees face extra

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Related tags: Stamp duty, Landlord, Renting, Leasing, Pub association, Bbpa, Government

£11m bill A new method of calculating stamp duty will cost licensees an extra £11m a year and could see a move towards shorter pub leases,...

£11m bill A new method of calculating stamp duty will cost licensees an extra £11m a year and could see a move towards shorter pub leases, according to the British Beer and Pub Association. The Treasury confirmed this week it would be introducing the new system of calculating tax on new leases on 1 December, despite protests from trade groups that pubs with long leases of 25 or 30 years will be among the hardest hit. The tax will require licensees to pay an upfront sum equal to 1% of rent payable over the entire lease. Up to now, licensees were charged a figure based on a year's average rent. The threshold for paying stamp duty will rise from £60,000 to £150,000 and the Government claims this will exclude 60% of retailers from the tax. The BBPA, however, says only 35% of pubs will be exempt. Under the current system the trade pays £3m to the Government but the BBPA estimates that Treasury coffers will swell to £14m. Spokesman Mark Hastings said: "It's a clear case of the Government consulting but not listening to the views of the small business sector. What this may lead to is shorter leases within the pub industry. The ALMR estimates that the average lease of its members would now attract a stamp duty charge of £9,000.

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