Pubs warn of business rate hike impact on the industry
Pubs could be pushed over the edge by increases to business rates, it has been warned, as chains including Greene King write to the government to appeal for smoother transition arrangements.
The rateable value of businesses, which is used to calculate rates, is poised to change for the first time in seven years in April with some properties set for a three-fold increase.
The hospitality industry’s fears are the latest to be raised, with campaigns already under way in towns such as Southwold where businesses feel increases are disproportionate.
EDP/EADT Top 100 Suffolk brewery and pub chain Greene King was among the firms to have co-signed a letter to chancellor Philip Hammond calling for specific hospitality sector rates relief in his first budget on March 8.
The letter from The Association of Licensed Multiple Retailers (ALMR), which includes All Bar One, Pizza Express and Wagamama, says: “Our sector is the only one to have been impacted by an increase in rateable value in every UK region.
“On average, the pub sector will see a 15% increase and restaurants a 23% increase across the country. All but three UK regions are faced with double digit growth and the average increase in rates bills will be 20%.”
The speed at which businesses transition from the old rate to the new is also changing, with a cap of 45% for large businesses replacing a flat rate of 12.5% – meaning bills climb faster.
Business rates are calculated by taking the rateable value of a property, based on potential rent price, and combining it with a multiplier set by central government.
The increases come at a time when pubs are facing higher costs from the national living wage.
Phil Cutter, co-chairman of Norwich City of Ale and landlord of The Murderers pub, said the rise against an already challenging backdrop for publicans would make it difficult for some to keep going. He said: “Having to pay an additional £300 to £400 a month can be a big ask for a pub when its margins are not that high.
“In comparison to some other businesses we pay a huge amount as a ratio of our revenue.”
He added rateable values set the cost of pub television packages, so could strike a double blow to businesses.
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