Diversified pubs face rates bill hike

27-Sep-2009 - Last updated on 28-Aug-2011 at 08:09 GMT

Pubs that have diversified by adding extra facilities to help them survive could be stung with higher business rates next year. Under a revaluation...

Pubs that have diversified by adding extra facilities to help them survive could be stung with higher business rates next year.

Under a revaluation process, set to take effect next April, pubs that have added facilities such as a Post Office or newsagent are likely to be hit with a bigger bill.

Government guidance for valuations admits additional facilities may not always generate "significant" extra profits but they "expand the customer base" using the pub.

The Valuation Office Agency (VOA) carries out a revaluation of all rateable values every five years to "maintain fairness" in the system.

Licensees can find out the new rateable value of their pub on Thursday, with the figure based on market rental values as of April 1, 2008.

And the Conservative Party claims that pubs that have diversified will end up with higher rates bills.

Caroline Spelman, shadow communities & local government minister, said: "Rural pubs that have diversified to survive and offer vital services like a Post Offices, will get a kick in the teeth through higher tax bills - despite being previously encouraged to diversify by government agencies."

Since 2001, hundreds of pubs across the UK have been offered help to diversify and survive through the Prince Charles-backed scheme Pub is the Hub.

This has included adding services such as Post Office, laundrettes and local convenience stores, through local government grants.

Last year communities and local government minister John Healey said: "The additional services provided under the Pub is the Hub scheme may or may not result in a revised rateable value in respect the subject property.

"This will depend on the extent of the services provided and any modifications undertaken to the property."

A spokesman for the VOA said: "The more popular a pub is, and the better its facilities, then the greater the potential for trade and the higher the rental value is likely to be.

"Events and facilities such as pub sports, beer gardens and any diversification either provide an indication of the popularity and therefore likely potential trade of the pub or constitute facilities likely to enhance trade."

However he stressed the system had been agreed with the industry and such details had been taken into account since 1990.