'We won’t have any pubs left' warns licensee facing 'killer' rates hike

By Daniel Woolfson

- Last updated on GMT

The Red Lion & Sun: popular pub faces massive rise in business rates
The Red Lion & Sun: popular pub faces massive rise in business rates

Related tags Rateable value Taxation in the united kingdom

A top gastropub operator has told of his despair upon learning his thriving pub’s business rates charges will increase by 300% over the next two years. 

Heath Ball, owner of the Red Lion & Sun, Highgate, London, was appalled to discover how much he would be expected to pay in business rates following the Chancellor of the Exchequer Philip Hammond’s spring Budget.

He told The Morning Advertiser ​(MA​): “My rateable value was £44,000 per year, which meant I paid about £20,000 in rates. I’ve just got my latest bill and the rateable value has gone up to £123,000.

“[The Government] is doing transitional relief, but this year (beginning 1 April), I’ve still got to pay £34,904 and, as it goes up, it will end up being almost £60,000 per year, just in rates. It’s f***ing murder.”

Business rates discount

The Government has announced a £1,000 business rate discount for pubs with a rateable value of less than £100,000, which the Chancellor has claimed will help 90% of pubs.

However, the announcement garnered mixed reactions from the trade, with critics claiming the Chancellor's move did not address the largest increases​ set to hit operators over coming months.

Ball warned that the UK risked losing many of its independent pubs if the Government pursued its current economic agenda.

“It’s not a good Government [for pubs],” he said. “Now with rent, rates and pension contributions, I’ve got to do an extra £25,000 this year. We’ve got beer duty going on as well, and wine​ – we’re getting it from all sides.

“For years we’ve been saying ‘save the pub’ and protecting them from developers but the biggest killer is the Government. How can this be saving the pub industry, this tax, tax, tax? We’re an easy mark.”

Calculating rateable values for businesses based on turnover rather than profit showed little understanding of the day-to-day running of hospitality businesses, he added.

“As a small business operator, you’re just getting f***ed in this country. [The Government] doesn’t want to look after pubs and it doesn’t want to look after small businesses,” he said. “At the current rate, we won’t have any pubs left. We’ll lose the soul of the community."

'It's going to get harder'

He added: “The tourism board will say ‘oh, come to England, we’ve got great pubs’ but what we’re going to end up with is a lot of sh*t pubs, with people just working on sh*t margins, trying to make a living and there will be no independent operators left. It’s just going to get harder and harder.”

Ball, whose pub was named Best Wine Pub​ at 2016’s Great British Pub Awards and consistently ranks in the Estrella Damm Top 50 Gastropubs​, joined a sea of voices condemning the Chancellor’s Budget as bad for the pub trade.

Tim Martin, the ever-controversial chairman of JD Wetherspoon (JDW), hit out at the Budget last week as he revealed JDW was facing combined cost hikes of £20m.

Reiterating calls for tax equality with supermarkets, Martin said: “Wednesday’s Budget will weigh far more heavily on pubs than supermarkets, especially since wage costs per pint or meal are approximately 10 times higher in pubs.

“The Chancellor was less than frank in his Budget speech, since he did not spell out the duty increases, giving the impression to many that there would be no increase.”

However, Martin told MA ​he still believed Prime Minister Theresa May’s regime was better for pubs than the last Labour government, which put up alcohol duty.

“I don’t think Cameron did too much to reverse it – I think the Theresa May regime is more receptive to argument,” he said.

A snap poll of 100 sites conducted by Epos Now reported this week that six out of 10 operators believed the Chancellor’s £1,000 discount would have a positive effect​ on their businesses.

But half said the Chancellor should have revised the system to make it ‘fairer’, while 15% said he could have ‘made the rate decrease a permanent fixture’. 

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