Complaints stream in over pub business rates calculations

By Gurjit Degun

- Last updated on GMT

Complaints stream in over pub business rates calculations

Related tags Rateable value Business rates Business rates in england and wales

Complaints over the way the Valuation Office Agency (VOA) calculates business rates have been streaming in, with licensees quoting rates bills increasing nearly three-fold.

A new system at the VOA means that it now bases business rates calculations on turnover, not taking into account net profit.

Steve Wilson of the King’s Head in Wells, Somerset, saw his rateable value (RV) increase from £20,000 to £54,500 because of turnover. He used to pay £970 per month, but with the new RV, he will be paying £2,360 per month next year because of a stepped increase. The rates payable differ from the RV because the local council will multiply the RV with a multiplier set by the Government.

He said: “The problem I have is that I can’t argue against the valuation because it’s accurate, based on actual turnover. My argument is that the whole system is corrupt. Basing rates on a pub’s turnover is woefully inadequate as a system for taxation because of the vast chasm of difference between turnover and net profit in a pub these days.”

Wilson has also raised the issue with his local MP Tessa Munt.

Jamie Langrish of the Parlour in Chorlton, Manchester, has seen his annual bill rise from £9,000 to a staggering £23,000. “The brutal fact is if our appeal doesn’t work, which takes up to 18 months in which time we have to pay the new amount, we will be forced to close,” he said.

Sharon Carter-Ward of the Bay Horse in Masham, Yorkshire, said her rates almost doubled from £11,500 to £20,500.

She went from paying £260 per month, when she first took over the tenancy, to £960 per month.

Cafe Mambo in Torquay that added a small cocktail bar to the top floor, was reclassified a pub by the VOA, resulting in its annual rates bill suffering a 300% increase, from £21,250 to £98,500.

A VOA spokesman said: "Rateable value is based upon the open market rental value of a property on a set date established by legislation, currently 1 April 2008. We have been using the valuation principle of fair maintainable trade to assess the rateable value of licensed premises since 1995, in line with industry practise.

"We regularly consult with bodies such as the British Beer and Pub Association, the Association of Licensed Multiple Retailers, The Guild of Master Victuallers and the Federation of Licensed Victuallers Associations to ensure our approach reflects changes in the industry as a whole.  However, where a licensee thinks their rating assessment is wrong, we would encourage them to contact us immediately on 0300 0501 501, or online at www.voa.gov.uk/valuation, to discuss the figures that we hold for their property.

"We want to ensure that all our assessment are correct and so we are very keen to hear from ratepayers if they have any concerns."

■ Having problems with your business rates? Email gurjit.degun@wrbm.com

Related topics Property law

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