MP urges action on pub business rates calculations
David Morris MP has put a written question to Parliament, asking the Chancellor of the Exchequer to “harmonise” business rates for pubs to “the normal ground rates applicable to other small business premises”.
Morris’s plea follows the news, reported in the Publican’s Morning Advertiser (PMA) last week, that Tessa Munt MP, parliamentary private secretary to business secretary Vince Cable, aims to introduce a bill in Parliament to change the way rates are calculated.
The Valuation Office Agency uses the fair maintainable trade (FMT) valuation method to calculate the rateable value (RV) of pubs. It uses actual rent and turn-over figures from pubs to arrive at FMT.
Morris told the PMA that pubs are having a hard time, with fewer people going out and supermarkets offering cheaper drinks, and the burden of business rates is adding to this.
He said: “Pubs do provide a service to the community, and I want to see something done about the way the business rates are calculated. It does not seem to be on anyone’s radar.
“I’ve been talking to publicans in my constituency and they are struggling — the rates are just adding to that. The better they do, the more they have to pay.”
In response to the question, David Gauke MP, exchequer secretary to the Treasury, said: “All non-domestic property has a rateable value assigned to it for business rates purposes, which is equivalent to one common measure — rental value — whether it is an office, shop, factory or pub.”
He said that the RV of pubs is based on actual rents, although those rents are analysed alongside turnover to ensure similar pubs are treated equally.
This methodology has been agreed with the British Beer & Pub Association.
Gauke added: “This uniform basis ensures consistency and fairness in the way all non-domestic property is valued for rating.”
But Morris insisted more could be done. “[The reply] is encouraging, but I want to see action.” He called on MPs from all parties to join forces and tackle the issue.
