Trade bodies call for ‘radical reform’ of business rates system

By Amelie Maurice-Jones contact

- Last updated on GMT

Radical reform: Trade bodies have called for urgent changes to business rates system (Getty/ ProstockStudio)
Radical reform: Trade bodies have called for urgent changes to business rates system (Getty/ ProstockStudio)

Related tags: Camra, Finance, Bii, Business rates, Government

Trade bodies have called for a rapid reform of the business rates system, which in its current state, has been deemed “unfair” for local pubs.

The British Institute of Innkeeping (BII) has submitted complaints to the All-Party Parliamentary Beer Group Business Rates Inquiry (APPBG) and the official Technical Consultation to Government, stating business rates lead to unfair tax for pubs. 

The APPBG will hear evidence this week from key licensees and industry professionals, including BII members, about the impact of business rates on the licensed trade, and their basis of calculation. 

The BII chief executive Steven Alton said: “We have consistently called for a fundamental reform of business rates to address this unfair tax burden on our members’ pubs.” 

After two years of closure and significant trading restrictions, the need for rapid reform is key as part of a package of support to help support pubs on their road to recovery is clear, according to Alton. 

The BII believes the hospitality sector has been overburdened with high tax for many years, and has consistently called for a full review and reform of business rates. 

Chronic imbalance

In particular, business rates reform needs to address the chronic imbalance between pubs on high streets and communities with the digital economy. This imbalance leads to pubs overpaying £570m per year, stifling investment and pushing viable local businesses towards failure. 

Alton added: “We look forward to Government making the necessary changes to help safeguard pubs in every community of the UK,” 

The Campaign for Real Ale (CAMRA) has also urged Government to reform the English business rates system to ensure pubs can survive on the road of recovery from Covid. 

As well as making sure online businesses pay their fair share, the organisation wanted ministers to ensure the business rates system better recognised the role of local pubs as community hubs. 

This might involve changes to the system that better reflect a pub’s profits, rather than just their overall turnover, and ending the current system whereby licensees who invest in their pub are then penalised with higher bills. 

Unfair system

CAMRA chief executive Nik Antona said: “Local pubs are at the heart of communities up and down the country and play a vital role in bringing people together and tackling loneliness and social isolation. As we emerge from the Covid pandemic, our locals are needed more than ever before.” 

However, even before the pandemic, pubs were hit by the huge and unfair burden of business rates which penalise pubs more than any other type of business, according to Antona.  

He continued: “With publicans facing huge increases in the cost of goods, energy and with rising staffing costs, it is absolutely vital that the Government urgently commits to changing the current business rates system to better support pubs – or else we could risk losing even more of our beloved locals for good.”   

CAMRA has also urged the Scottish and Welsh Governments for similar changes to their Business Rates system, and has asked Norther Irish parties to commit to review their own systems after May’s Assembly elections. 

The call echoes CAMRA’s submission into an Inquiry on the effect of Business Rates on the beer and pub industry, which has been held by a cross-party group of MPs on the All-Party Parliamentary Beer Group. 

Related topics: Legislation

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