Businesses Call for Inclusion in Any Pub Rates Backtrack
High Street shops, pharmacies, and music venues have united in urging Chancellor Rachel Reeves to eliminate the impending business rates increases that will significantly affect them, alongside pubs. The government is expected to announce a reversal on the planned hikes for pubs in England soon. Landlords and pub owners have voiced strong opposition, with over 1,000 pubs banning Labour MPs from their establishments in protest.
A Broader Call for Business Rates Relief
Several lobby groups and backbench MPs are advocating for the government to extend this relief beyond pubs. They emphasize that many businesses are facing similar financial pressures and may struggle to absorb the higher costs.
– Anna Turley, chair of the Labour Party, stressed on BBC’s Today programme, “Where businesses are telling us they are struggling and they need more support, it’s crucial that the Chancellor engages with them and considers how we can assist.”
Businesses are concerned as business rates are set to surge over the next three years, coinciding with the phasing out of Covid-era support and a reevaluation of property values to reflect post-pandemic normalcy. Despite the government announcing additional support in the November Budget, many businesses believe they will find it hard to cope with the increased rates.
The British Independent Retailers Association (Bira) has questioned why their members—comprising High Street shops, restaurants, and cafes—are not eligible for the same relief as pubs. Chief Executive Andrew Goodacre pointed out that independent retailers face exactly the same challenges as pubs but have been excluded from discussions regarding additional support.
Fairness in Business Rates Reforms
Surinder Arora, who manages several hotels throughout the UK, criticized the government for considering a carve-out exclusively for pubs. He stated, “The business rates bill for just one of my hotels surged by £12.4 million after discounts were reduced. The new figures are staggering, and unfortunately, my customers will feel the impact.”
Michael Van Clarke, founder of a prestigious London hair salon, described the current business rates system as “dysfunctional.” He remarked, “Most service-heavy businesses haven’t fully recovered from Covid lockdowns. This rate rise is just one more setback in a series of punishments we have endured for years.”
The British Retail Consortium (BRC) has echoed these sentiments, suggesting that the ongoing business rates system is inadequate. CEO Helen Dickinson remarked, “This latest announcement appears to be nothing more than a temporary fix on a broken system, rather than the comprehensive reform needed.”
Business Rates: What Are They?
Business rates are a tax calculated based on the rateable value of a company’s premises, reassessed every five years. The last evaluation in 2021 considered the pandemic’s impact on business activity, while the upcoming assessment will reflect significantly higher values.
To mitigate the effects of rising rates, Chancellor Reeves proposed shifting much of the burden from smaller businesses onto larger firms. The calculation for final business rates involves multiplying a premise’s value by a set number, known as “the multiplier.” As of April, this multiplier will be more favorable for smaller businesses in the retail, hospitality, and leisure sectors, compared to their larger counterparts.
The government had previously provided a discount on rates during and just after the pandemic, which started at 75% and is being reduced to 40% this financial year, ending completely in April. A transitional relief package of £4.3 billion has been introduced, allowing gradual adjustments over three years.
Voices from the Ground
Concerns regarding the forthcoming rates reforms are shared by various MPs. Conservative MP Dame Caroline Dinenage recently expressed to the Chancellor that venues, clubs, and cinemas nationwide are “already struggling for survival,” warning that the planned reforms risk pushing many entities “over the edge.”
Chancellor Reeves acknowledged earlier this week that while the government has reduced tax rates for pubs and hospitality, the Independent Valuation Office increased property valuations accordingly. She mentioned, We are working with the sector to assess the implications of various policies, including planning and licensing, and I want to support our pubs and High Streets.
As discussions continue regarding the potential backtrack on pub rates, businesses across all sectors hope for a comprehensive approach that includes fair support for all.