Chancellor John Healey is expected to increase the rateable value threshold at which businesses begin paying business rates from £12,000 to £18,000 as part of the Budget next week (28 October).
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According to reports, the change could remove around 75,000 properties from business rates altogether, including approximately 2,600 pubs, 2,500 restaurants and 1,600 cafés in England.
However, operators told The Morning Advertiser (MA) the measure would have a limited impact across much of the pub sector.
Tim Bird, of Cheshire Cat Pubs and Bars, said: “It makes no difference at all to any of our businesses. It simply helps very small businesses avoid paying rates.
My feeling is every business, no matter how small, should pay something, even if it’s £500 a year. As I’ve always said, business rates for pubs need a complete overhaul, especially in terms of how they’re calculated.
Tim Bird
Multi-site London pub operator Paul McAstocker said any support on business rates would be welcome but added many pubs already had rateable values significantly above the proposed threshold.
“Any help with business rates is welcomed, obviously, and this will help those currently at the lower end of the rates. Pubs like the Wooden Cross already sit well over the threshold. We need more than that as an industry”
Ayesha Kalaji, chef-owner of Queen of Cups and Estrella Damm Top 50 Gastropubs Chef of the Year, said the reported measure would not address what she viewed as the sector’s principal tax burden.
I appreciate the Chancellor is trying to help, but this is not going to have any true meaningful impact on the survival of our industry and is merely a token gesture, frankly. Hospitality has repeatedly cried out that VAT is the problem. Over and over and over. The Government actually needs to listen to us instead of trying to placate us. Business rates are not the problem, VAT is the problem.
Ayesha Kalaji
‘Look at overall costs’
JDW (JD Wetherspoon) founder and chairman Tim Martin also cautioned against assessing any individual Budget measure in isolation.
It’s vital in looking at the outcome of the Budget for licensees and trade organisations to look at the overall costs to the industry, so as not to be fooled by smoke and mirrors.
Tim Martin
“Let’s look at excise duty, employment costs, business rates, sugar taxes, fruit machine duty and everything else together and not get drawn into a PR game,” he added.
The reports come days after Chancellor John Healey met hospitality and business leaders, including UKHospitality, ahead of the Budget, with discussions focused on rising operating costs and measures to support investment and growth.
Healey has also said the Government would look to give businesses “a bit of breathing space” at the Budget, while operators and trade bodies continue to push for wider tax reform.
The Treasury declined to comment directly on the reported changes.
An HM Treasury spokesperson said: “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
The department added the Chancellor remained focused on giving families and businesses “a bit of breathing space”, supporting British jobs and driving growth while meeting the Government’s fiscal rules.
The Department for Business and Trade referred questions on the reported changes to the Treasury.
