Business rates contribute to one in five pub closures, claims exclusive BBC research

By Daniel Woolfson

- Last updated on GMT

Business rates: problem is "magnified" for pubs
Business rates: problem is "magnified" for pubs

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High business rates have contributed to one in five pub closures in England and Wales over the past six years, an exclusive BBC Radio 4 investigation has claimed.

The broadcaster revealed the results of its research – undertaken by rates consultants CVS – during a pub-focused episode of consumer radio show You & Yours​ yesterday (15 February).

Speaking to the programme, Jo Fuller, who closed her Somerset pub, the Castle Inn, Yeovil, due to rates pressure, said: “I spent a lot of money renovating [the pub], tried very hard, had a good chef and good food, but with the business rates I just couldn’t stand it anymore.

“I did talk to the local authority about getting relief on the business rates, but it didn’t happen. It fell on deaf ears.

“The really embarrassing time was when they sent bailiffs round on a Friday lunchtime – they came in and said ‘if you don’t pay some money now, we’re going to come in and take all your goods’.”

Fuller closed her pub and is understood to have applied for planning permission to turn it into a residential property so she can sell it.

Four pubs per day

As of last December more than 11,000 pubs in England and Wales had closed – the equivalent of four pubs a day and 20% of the total, CVS’ research reported.

CVS managing director Mark Rigby told You & Yours​: “Generally businesses go out business because they can’t cover their cost. The business rates burden has been one that they’ve had to shoulder, but based on values from a different time.”

He added: “Anything that keeps your operating costs high and not reflective of your current circumstances is going to be a factor in terms of the long-term health of the business.”

Business rates will change in April, but because rates for pubs are based on estimated turnover, many pubs anticipate a considerable – and potentially unmanageable – burden.

The Association of Licensed Multiple Retailers wrote to Chancellor Phillip Hammond​ earlier this week, urging him to provide transitionary rates – similar to that recently offered to broadband providers – when the new rates kick in.

Problem magnified for pubs

ALMR chief executive Kate Nicholls previously told The Morning Advertiser (MA): ​“The unique way in which [rates] are assessed [in the licensed trade] means that the problem is magnified for pubs. This is the only sector facing increases in rateable value in every UK region.”

She further blasted the Government’s decision to give online retailer Amazon a business rates cut, saying investment and jobs in pubs were at risk if it did not act quickly to tackle the problem.

UKIP MEP Bill Etheridge, who has spoken out on several pub-related issues over past months – including calling for the return of traditional crown stamps​ on pint glasses – joined those condemning rates rises on Monday (13 February).

He said rises risked undoing the ‘good work’ of trashing the beer duty escalator back in 2013 if they were too punitive and urged the Government not to ‘tax pubs to death’​.

Listen to the broadcast of You & Yours on BBC Radio 4.

Related topics: Legislation

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