Tax changes force 15 pubs a week to close, data reveals
Altogether 390 alehouses were demolished or converted into other types of use such as homes and shops between 1 April – when the revaluation of business properties which came into effect – and 31 September, CVS, which assessed the information, has said.
However, the business rent and rates specialists warned that the numbers could be ‘considerably higher’ as empty pubs still pay rates after a three-month exemption following closure. It also insisted that pubs faced a “triple whammy” of rising inflation and rates and the end of the pub £1,000 pub discount, which was introduced in April 2017 for one year only.
In total, 20,514 pubs in England are set to see inflation busting property tax rises totalling £59.68m next April – an average rise of £2,909 per pub – the organisation said.
Transitional relief
Business rates increase annually in line with September’s Retail Prices Index (RPI), which the Office for National Statistics has reported at 3.9%.
However, under the revaluation, transitional relief means large increases to bills are phased in gradually over the five years of the tax regime.
The ‘caps’ for 2018-19 limiting increases in bills stand at 7.5% for small properties, 17.5% for medium and 32% for large, to which the effects of September’s RPI is then added, CVS explained.
"One in five pubs closed during the last tax regime leaving the lowest ever number of pubs,” said Mark Rigby, CVS chief executive.
“While 15 pubs a week, since the tax changes, have been lost, the reality is that number is considerably higher as empty pubs still pay rates after a three-month exemption following closure."
Operating costs
He added: “The Chancellor must be bold within his upcoming Budget next month giving pubs a helping hand through an unprecedented stimulus of freezing rate rises in April 2018 and protecting the pub discount. Otherwise, increased operating costs will have to be passed on to customers, already squeezed by inflation, through higher prices at the bar.”
Association of Licensed Multiple Retailers (ALMR) chief executive Kate Nicholls added: “The ALMR has been warning that rates increases are rapidly becoming unsustainable for many businesses, and calling for the Government to deliver support for eating and drinking-out venues at the Budget.
"The current system of business rates is completely unfit for purpose and needs wholesale reform, with pubs being hit particularly hard. If the Government doesn’t deliver further relief for businesses in the short term and commit to a thorough re-think of the system in the long term then it is entirely likely that we will see more businesses close and more jobs lost.”
Brigid Simmonds, chief executive of the British Beer & Pub Association said: “The business rates burden is undoubtedly contributing to pub closures, and decisive action is needed on both rates and beer duty in the Budget. Whilst we need wholesale reform of business rates to make the burden fairer on pubs, we are calling for the extension of pub specific rates relief in the Budget, and its increase from £1,000 to £5,000, alongside a cut in beer duty, which also provides targeted help for pubs.”
