Darling u-turn on rates could offer pubs hope

Pubs facing a massive hike in their business rates bill have been offered some hope after a partial U-turn by Chancellor Alistair Darling.

Licensees were facing a five per cent hike in their annual bill from tomorrow, but Darling has cut this to two per cent. However the remaining three per cent rise will be be spread over the next two years.

On top of this, some pubs were facing up to a 300 per cent rise in their bill, due to the scrapping of transitional rate relief. The government said owners can also defer 60 per cent of that increase too.

Darling told MPs: "I am very conscious of the fact that businesses in this country were faced with an increase to business rates of five per cent simply because the increase in business rates is linked to the rate of RPI inflation last autumn.

"But RPI inflation has now fallen to 0 per cent in the last month and it is expected that it will fall further than that. So I want to bring forward a measure that will help businesses.''

Despite this, regulations will not be in place until July and pubs must continue paying their rates as normal until then.

Councils will write to businesses once the regulations are in place to offer them a deferral.

Previously the Local Government Association said it was "unacceptable" that some businesses could see their rates bill double or even triple if relief was scrapped, putting them under threat.

More than half of all councils are already reporting that firms are having problems paying business rates.

For more information on the changes see this fact sheet​