Demand for fairer deal on rates

With the Chancellor due to deliver his keynote statement to Parliament next Wednesday (25 November), key trade bodies have written jointly to George Osborne, calling for further action to help ease the burden on pubs.

The letter, from the British Beer & Pub Association (BBPA), Campaign for Real Ale, Association of Licensed Multiple Retailers, the Society of Independent Brewers, plus many others, sets out three priorities on business rates for pubs:

• Freeze the business rates multiplier, benefiting all pubs and worth around £5m to the sector
• Extend Small Business Rate Relief for another year, benefitting a third — about 15,000 — of pubs
• Apply Retail Relief — a scheme that provides a discount for pubs with a rateable value of £50,000 or less — for another year and increase the discount to £2,000 per year, per pub

Stark figures in the letter point to BBPA research from earlier this year that revealed pubs are particularly disadvantaged by business rates, paying around 2.8% of all UK receipts from this tax, despite accounting for just 0.5% of turnover — an overpayment, according to BBPA figures, of £500m per year.

The letter also makes clear that relief for pubs is critical, given the growing degree to which pubs are now disadvantaged, as result of delays to the rates revaluation process, meaning new rateable values (RVs) won’t come into force until April 2017.

A survey of PMA readers, as part of our ongoing Better Rates for Pubs campaign, found that more than half of licensees describe business rates costs as having a ‘major impact’ on pub profitability. Just 7% of respondents felt their pub’s current RV was ‘fair’.

BBPA chief executive Brigid Simmonds said: “More action from the Government in the Autumn Statement is needed, as pubs are hugely overburdened. In the longer term, we need to ensure that the rates burden can be spread across a much wider range of business, and across the whole economy.”

ALMR chief executive Kate Nicholls said: “The businesses that are driving growth across the UK’s high streets are bearing a disproportionate burden. The Government must act decisively to ensure a fair and flexible system that treats all businesses equally in the way they are assessed and encourages success.”

Last month Osborne announced a shake-up of the rates system, prompting fears that cash-strapped councils will use pubs to generate extra income.

The Chancellor said 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 has gone back to Westminster.