Stop using pubs as ‘cash cows’, reform business rates now, says ALMR

By Fred A'Court

- Last updated on GMT

Head of steam: pressure for business rates reform continues to grow
Head of steam: pressure for business rates reform continues to grow

Related tags: Business rates, Business, Taxation in the united kingdom, Small business

The Government should push ahead with a wholesale root and branch reform of the rates system that was promised at this year’s Spring Budget and during election campaigning, the Association of Licensed Multiple Retailers (ALMR) has said in a letter to the Government.

Reforms are needed urgently as pubs and restaurants continue to pay a disproportionate amount through an unfair system, said ALMR chief executive Kate Nicholls.

The industry body has written to the Department for Communities & Local Government highlighting that eating and drinking out businesses are paying around £1bn more than if they were being assessed on a turnover-based system, and that a £1,000 promised rebate has yet to be paid to many pubs.

Pressure for reform continues to grow as the drinks industry unites behind claims it has been hit hard. Just before the general election ALMR along with other trade bodies including the British Beer & Pubs Association, co-signed a letter to three major political parties making the case for fundamental reform of the business rates​ system. Pubs, many of which are small, independent businesses, pay 2.8% of the total business rates bill on just 0.5% of rate-paying business turnover.

Queen's Speech scrutiny

The Queen’s Speech this Wednesday (22 June) will be closely scrutinised by the pub industry for further details of measures to ease the burden of business rates first promised by chancellor Philip Hammond in March. Rate relief measures amounting to £435m targeted at small businesses facing the biggest increases were pledged in the Budget. Hammond said that the Government would also provide a £1,000 discount on business rates bills for all pubs with a rateable value of less than £100,000, which covers 90% of all pubs in England.

Business rates, the commercial equivalent of the council tax, were recently reset for the first time in seven years, saddling some small, family run pubs, particularly in urban areas, with rate rises of nearly 150% over the next five years. A minority of pubs in metropolitan areas such as in Greater London are facing what has been described as astonishing increases in the rates demanded​ although some pubs have also seen reductions.

Commenting on the ALMR’s latest call for reform, Nicholls said: “Eating and drinking out businesses are paying around £1bn more than if they were being assessed on a turnover-based system. The current system treats pubs, restaurants and bars little better than cash cows and must be radically changed to give businesses a fair opportunity to grow and succeed. This makes a stark comparison to online businesses based away from high streets that have seen their rates bills actually drop.”

She highlighted the fact that many pubs have still not received the £1,000 relief they were promised and said ALMR has pushed the Government to ensure this rebate is applied and extended to even more businesses.

“Our letter also calls for the Government to ensure that rates appeals are dealt with accurately and promptly. Too many businesses are waiting too long to have their disputes resolved, all the while unsure about what costs they should be paying,” Nicholls said.

Related topics: Legislation

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