Caution over business rates revise

By Emily Sutherland contact

- Last updated on GMT

There are fears the changes could only benefit more affluent areas.
There are fears the changes could only benefit more affluent areas.

Related tags: Business rates, Taxation in the united kingdom, Business, Conservative party, Chancellor

The trade has given George Osborne’s shake-up of business rates a cautious welcome, despite some fears that squeezed councils will use pubs as ‘cash cows’ to generate extra income.

At the Conservative party conference last week, the Chancellor revealed that the nationally set uniform business rate will be scrapped, with councils given freedom to set their own rates and keep all the money raised. Previously, half of the £26bn generated annually by business rates has gone back to Westminster.

Punch Taverns chief executive Duncan Garrood told the Publican’s Morning Advertiser that although he welcomed any changes that would help ease the tax burden on pubs, he would “advise caution against any local authority choosing to increase the rate as a form of additional revenue”.

However, Victoria Macdonald, who runs Enterprise tenancy the Cellar House in Norwich, remained sceptical of the plans. “Having the huge amounts of money raised by business rates staying in local areas feels like a good thing. Flourishing councils feeling the benefits will be able to reduce them,” she said. “However, councils who are more strapped for cash need to be told they can’t look at small businesses like pubs as some kind of cash cow. It could cause huge damage if they do.”

The British Beer & Pub Association (BBPA) argued that although the proposals could see rates start to fall for venues in more affluent areas, more needed to be done to create a level playing field for pubs.

Chief executive Brigid Simmonds said: “At present, pubs pay 2.8% of all business rates but account for just 0.5% for turnover.

“For some time, local authorities have had the ability to use discretionary relief to help local businesses, but most only use it (if at all) for new businesses to help them become established. Almost none has been used to help pubs. Most pubs have been operating for decades or hundreds of years and while local people value them, I am not sure that their support is always backed by the local authority.”

The BBPA is calling on the Chancellor to freeze business rates in next month’s autumn statement, continue retail relief which helps 75% of pubs, as well as continue small business rate relief and review rural rate relief.

The Association of Licensed Multiple Retailers warned that any changes made by councils should be done to boost investment and increase accountability to local businesses.

Related topics: Legislation

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