Pubs 'will lose out' in next business rates revaluation

By Ellie Bothwell

- Last updated on GMT

Related tags Bnp paribas Business rates Business rates in england and wales

A property advisor has warned that pubs in London will be most affected by the rating revaluation
A property advisor has warned that pubs in London will be most affected by the rating revaluation
Pubs and restaurants risk losing out in the 2017 rating revaluation as the Uniform Business Rate (UBR) is likely to be set at 50p in the pound, a property advisor has warned.

BNP Paribas Real Estate said this would be the highest UBR level ever and is equivalent to 50% of the current rental value of a property, enabling the Government to collect £26bn in revenue.

In 2012 the Government said it would postpone the scheduled 2015 revaluation for two years, forcing retailers to pay rates based on 2008 inflated property prices. The business rates assessments from 2017 onwards will be based on a property’s rental value on 1 April 2015.

The Valuation Office values pubs based on a percentage of the turnover. BNP Paribas said this means the trade achieved in the last two years will influence the new assessments, and with rental values in the sector being pushed up recently due to increased competition the rateable values in the pub sector will reflect this growth.


BNP Paribas head of licensed leisure Nigel Ball said: “Restaurants and pubs have enjoyed greater growth in the last couple of years but risk being ‘losers’ in the 2017 rating revaluation.

“This growth together with decisions made with regard to rents paid now will impact upon the rates in 2 years’ time. However, we strongly believe that reform to the valuation process is needed so that successful operators are not penalised for achieving success.”

He added that pubs and restaurants most affected by the 2017 rating revaluation will be in London, where West End prime rateable values are forecast to increase by 55% and in the City increases of 20% are expected.

The firm cites Manchester as another ‘loser’ with increases of 25% expected while Newcastle, Edinburgh and Glasgow are expected to see increases of 19%, 10% and 10% respectively.


However, it said Sheffield, Leeds, Liverpool and Birmingham licensed leisure properties will see little change in what rates they are paying currently.

Recession-hit pubs

The figures follow research from property and rating consultancy Gerald Eve which showed that retailers in London’s West End could face an 80% hike in business rates in the next revaluation.

However, Gerald Eve associate Chris Shearer said that pubs that didn’t fare as well during the recession should expect a reduction in their rate bills.

Regarding the review of the business rates system, BNP Paribas predicted that transitional relief will be removed, following the lead of Scotland and Wales, and there will be a shortening of the revaluation cycle to three years, to prevent the lags seen during the latest cycle.

It said the Government will “not have enough time to introduce any radical changes”.

Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers, said: “For far too long the business rates system in the UK has failed to take into account the needs of modern licensed hospitality businesses. We are in need of a much more flexible, responsive system that takes into account the changing nature of pub and bar businesses and does not penalise successful employers.”

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