Licensees 'holding off taking any action' over rates uncertainty

By Liam Coleman contact

- Last updated on GMT

Decision day: the upcoming budget will define operating costs for licensees for years to come
Decision day: the upcoming budget will define operating costs for licensees for years to come

Related tags: Public house, Taxation in the united kingdom

Confusion over whether pubs will be entitled to transitional business rates relief has meant that licensees do not know what action to take from April.

Last week communities minister Sajid Javid gave businesses hit by hefty rate rises some hope when he announced​ he planned to work with the Chancellor to provide "further support" to those worst hit by an increase when the new rates take effect in April. However, this seems to have merely increased uncertainty among licensees.

Javid's department has refused to confirm if there will be specific transitional relief or a cap on rate increases for the pub and hospitality industry. Therefore, while there is now increased optimism among licensees that some form of concession will be made to pubs, it is making planning more difficult.

Jeremy Hague, licensee at the Egerton Arms, Chelford, Cheshire, will see his rates increase by 125% if he is provided with no transitional relief or cap. However, he has said he was now "holding fire" on taking action around a potential increase in rates. "We are holding off taking any action because I am confident that the Government will admit that it has made a serious judgment error," he told The Morning Advertiser​.

Similarly, Martin Whelan of north London's the Tollington has said he will not be taking any action until specifics are revealed; something he is hoping to see in the budget on 8 March. "Nobody knows exactly how possible transitional relief is going to work until the Budget so I will be reserving my decision until after then," he said.

Price rises likely

The Budget may also bring with it positives for pubs in the form of a beer duty cut, something that the BBPA (British Beer & Pub Association) has campaigned​ for fiercely. Whelan therefore says that both him and other licensees he has spoken with are anticipating the need to put prices up to mitigate increased business rates, but are still waiting to see what will be announced in the Budget.

"We are waiting for the Budget to see if we will have a freeze or cut on duty in beer before taking a decision on what to do with prices. 

"But publicans will have to do it [put prices up]. You can't just suddenly come up with several grand to take off your bottom line."  

Related topics: Legislation

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