New rates could be damaging for pubs

New business rates could put pubs in danger of being “paralysed” according to the Association of Licensed Multiple Retailers (ALMR) which could ultimately affect pub insurance prices. They have wrote to the Chancellor calling for a rates reform.

The budget is due to be announced in March and the ALMR has urged Chancellor Phillip Hammond to consider changing the way rateable values for pubs are calculated.

The business rates take effect in April 2017 and research from the ALMR has found that pubs will, on average, see a 15% rise in rateable values even though other industries will see a reduction.

ALMR chief executive Kate Nicholls told The Morning Advertiser, the association had written to the Chancellor because the industry was approaching a “crucial moment”.

“Our letter to the Chancellor, and much of our main budget submission, concentrates on the issue of businesses rates – an issue that the ALMR has been fighting for years. We now approach a crucial moment where the government must act to ensure that rates bills are equitable, in order to protect investment, growth and employment in our sector, which is a key economic driver. Business rates are an issue for many businesses but the unique way in which they are assessed means that the problem is magnified for pubs. This is the only sector facing increases in rateable value in every UK region. Pubs are being paralysed by exorbitant rates, which often can mean putting off investment or employment. We need action on this issue right now to protect the futures of the UK’s pubs and bars” she said.

Traditionally, business rates are calculated differently for pubs as they take account of the trading potential as well as site value. This is an issue that has consistently come under criticism from trade bosses.

On Radio 4, Nicholls said “Uniquely for pubs, rateable values are based on trading potential, as well as what the property could be rented for. That is why we are paying a disproportionate burden of business rates. Over the course of the past 7 years, we have seen an explosion of e-commerce,which the business rates regime hasn’t kept pace with. Retailers and businesses with office space can now generate the same amount of turnover from a much smaller physical premises. Pubs, bars and restaurants are bricks and mortar premises that can’t be moved online, so they are bearing a disproportionate burden.”

A second voice in the form of The Glasgow Chamber of Commerce is another trading body that has shown it’s support. The group’s chief executive, Stuart Patrick “We are in a situation where licensed premises are subject to a different assessment process than businesses in other sectors, creating an unequal playing field. Glasgow’s night-time economy which includes world-class restaurants, bars and nightclubs, is a key driver for people choosing to visit the city and this revaluation process sends out the wrong message. Businesses in the leisure industry should closely check their revaluation and start the appeal process if they are affected by a large rise in rateable value”.

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