At least £1k on rates at 6,705 pubs

At least one in seven pubs face an additional £1,000 or more on their business rates under new plans.

Currently 6,705 pubs will be hit by supplementary rates — but rating expert Michael Yass from Fleurets believes that by 2010, when the plans would take effect, the number would have grown.

The Business Rates Supplement Bill will allow unitary councils — mainly from large cities — to set a supplement rate to promote economic development locally.

It will apply to premises with a rateable value over £50,000 in England and Wales. Councils would choose whether to levy the extra fee, proposed at 2p in the pound.

Association of Licensed Multiple Retailers spokeswoman Kate Nicholls said: "At a time when we are facing the worst recession in living memory, it seems nonsensical to impose yet a further tax on business."

Tom Richardson, chairman of BII's London region said: "Councils should consider they can increase economic development by ensuring pubs are assisted and not forced out of business by high rates and taxation.

"I would urge local councils to remember that pubs and bars employ a large number of people and those people spend their salaries in the local area, thereby creating a much-needed re-investment of money back into the local community.

"This is a far more sustainable model than simply taxing small businesses out of existence — which will have the opposite effect."

Tony Payne, chief executive of the Federation of Licensed Victuallers Associations, said: "Pubs are getting a double whammy here as they didn't benefit from the VAT cut like other small companies, and now they're being taxed in another way."

Around 20% of pubs affected are in Greater London. The Greater London Authority has already announced it will impose the extra tax to fund the Crossrail development.

Authorities must hold consultations before charging a supplement and ballots of firms will be needed if the aim is to fund more than one third of a project. Councils would decide how long the supplement should last and whether anyone should get reductions — these could be possible for empty properties and those in business improvement districts.

The Bill's first reading before Parliament took place last week.