BBPA calls for business rates reform after pubs overpay £570m

By Rebecca Weller

- Last updated on GMT

BBPA calls for business rates reform for the hospitality sector: pubs have overpaid £570m in business rates (Credit: Getty/Dimensions)
BBPA calls for business rates reform for the hospitality sector: pubs have overpaid £570m in business rates (Credit: Getty/Dimensions)

Related tags Bbpa Legislation Finance Business rates

British Beer & Pub Association (BBPA) has called for a business rates reform for the hospitality sector in response to the All-Party Parliamentary Beer Group (APPBG) business rates inquiry.

The brewing and pub industry generates £23bn in economic value and supports 900,000 jobs, while 85% of pubs in the UK are operated as SMEs.

However, pubs pay more in business per pound of turnover, than any other business sector, according to BBPA, and the business rates bill for hospitality accounts for 2.5% of total business rates paid, despite only representing 0.5% of total rateable turnover, resulting in an overpayment of £570m.

Disproportionate burden

BBPA chief executive Emma McClarkin said: “It is clear the current business rates system places disproportionate burden on pubs and brewers which is stifling their recovery and ability to return to sustainable growth.

“Reform is needed to create a system which accounts for how the economy functions in the modern day.”

BBPA submitted, based on these statistics, it does not believe the current business rates system is fit for purpose and does not reflect a fair or equitable model for taxing hospitality business.

The APPBG’s aim is to understand the impact of business rates on pubs; the efficacy of the valuation process and appeals system; the fairness of business rates on a sectoral basis, and the impact of the Government’s current proposals for reform.

The inquiry will also look into hospitality as a catalyst for inward investment and options for business rates reform, including rebalancing the burden of business rates between digital and physical economies.

Levelling up and regeneration 

In order to tackle what the BBPA deemed an unfair system, the association has recommended the introduction of an online sales tax, explicitly used to reduce the burden of rates from physical properties and a permanent relief or unique property-based multiplier, exempt from current Subsidy Control limits.  

McClarkin added: “Pubs and brewers are at the heart of communities fostering social cohesion as we reconnect and recover from the pandemic.

“With the required support our sector can deliver jobs and additional economic value in every part of the UK, supporting levelling up and the regeneration of high streets and town and city centres up and down the country.”

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