Gareth Kavanagh, of the Lass O’Gowrie in Manchester, applied for a reduction in business rates on the grounds of material change of circumstances because the BBC office across the road from his pub is now empty. It used to have 600 employees who would visit the Lass O’Gowrie. The office moved to Salford, Manchester, in November 2011.
However the Valuation Office Agency (VOA) refused the application because the building has not been demolished and it could be occupied at any time. The Lass O’Gowrie has seen trade drop by one third since the BBC office closed.
Kavanagh currently pays £2,100 per month in business rates, with a rateable value (RV) of £50,000. He has 40 covers in his pub.
He said that a venue of a similar size close by has an RV of £12,000, but it has a 600-capacity nightclub in
The VOA uses the fair maintainable trade (FMT) valuation method to calculate the RV of pubs. It is guided by actual market rents and turnover figures from pubs, to arrive at FMT.
Kavanagh said: “Business rates are the most unjust thing facing us. People are moaning about VAT and the beer duty, but we can just adapt to that. They [the VOA] set the rates every five years, but I think they need to do this more often. It’s a poorly thought-out system.
“They have to find a way of assessing pubs on their profitability as well as their turnover.”
He added: “We are dependent on the man [who owns the former BBC offices] knocking that building down. [The Government] has got to do something about buildings that are not in use.”
A VOA spokesperson said: “We cannot discuss individual cases. If there has been a physical change in the location, such as roadworks that prevent access to a property for a significant period, then we may be able to offer a reduction and ratepayers should contact us with the details. However, these changes do normally need to be physical.”