The Home Office and the Local Government Association (LGA) have written to licensing chiefs to inform them that they can suspend payments on levies and licensing fees.
It comes after pressure from organisations representing businesses in the late-night economy, however, operators are worried councils will choose not to suspend payments.
Licensees have been urging councils to issue a suspension to all pubs that would usually operate late into the night and have to pay an annual charge.
British Beer & Pub Association chief executive Emma McClarkin said: “Clearly any levy charges for pubs while they are closed will be very difficult to pay, including the late-night levy.
“We are urging licensing authorities to consider the difficulties the pub sector is facing and defer the payment of late-night levy fees, in line with Government guidance.”
Martin Whelan runs three pubs in north London: the Tollington, Big Red and Lincoln Lounge. He hopes Islington Council will change its mind and refund him for his levy payment for this year, in addition to suspending the next payment due in September.
He has to pay around £100 a week for each site, which he says is money that could go to more crucial overheads, such as insurance or his own bills.
He said: “The money is sitting somewhere in the Government or council’s coffers somewhere. To say it’s frustrating is to say the least.
“It's something that really needs to be looked at. It isn’t across the country so, basically, certain pubs in certain [council] boroughs are getting shafted.”
Only one of his sites qualifies for a grant from the Government because the other two have rateable values in excess of the £51,000 cap, and Whelan cannot place himself in furlough.
He said: “You’re paying through the nose. The council is saying it’s a statutory thing but what I’m looking for is somebody with more power than me to bring this to someone’s attention. It is a lot of money coming out of a business that you paid for in advance, with nothing coming in.
“If they do not do something rapidly, there won’t be a late-night economy [after coronavirus] and late-night bars will not need the staff or entertainers. They don’t seem to be listening to what the night czar of London has suggested weeks ago.”
Night czar of Greater London Amy Lamé wrote to the boroughs in the city that enforce a late-night levy and asked them for a year-long licence fee holiday, at the start of this month.
She said businesses that were subject to the charge would be “vital” in rebuilding the economy in the aftermath of the coronavirus outbreak.
It is not just councils in the capital that operate late-night charges, other councils with similar schemes include Newcastle, Southampton and Liverpool.
UKHospitality chief executive Kate Nicholls said: “Late-night levies are a dreadful prospect at the best of times. They squeeze businesses, restrict investment and put jobs at risk. They have also been denounced by a House of Lords report.
“Following calls from UKHospitality, the Home Office has already written to licensing chairs specifically highlighting that levy payments and licensing fee payments can be suspended where business have been affected by the outbreak – which we urge all councils to do.
“At a time such as this, it is ludicrous to expect late-night businesses to continue paying. Late-night businesses are all closed and have no revenue. There is no night-time economy to speak of at present. It begs the question, what are the levy funds are being used for?”
The LGA said councils still had to factor in administration costs.
A spokesperson said: “While councils want to support local businesses as much as possible, they still need to be able to cover the costs of issuing and administering licences and the work this involves, particularly at a time when costs in other areas have increased significantly.
“Where there is flexibility, councils will consider practical ways to support businesses impacted by restrictions. However, for certain types of fees, for example those set under the Licensing Act 2003, councils are not able to provide refunds or discounts because fees are set centrally.
“We continue to make the case that Government should allow councils to set their own fees, which would help them to better support local businesses, particularly during emergencies such as this.”
An Islington Council spokesperson said they would look at the guidance on staggering payments for the coming year.
They added: “We are acutely aware of the difficulties faced by the late-night industry during this health crisis. We want to help them in any way we can, and are looking at how best to support them now and in the months to come.”