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Business rates / 24 August 2021

Pubs overpay on Business Rates by £570 million, says BBPA

Trade association says ‘radical’ overhaul of rates system needed post-COVID in consultation with Treasury 

The British Beer & Pub Association, the leading trade association representing brewers and pubs, has today revealed that pubs overpay their fair share of Business Rates by £570 million a year.

According to the trade association, the pub sector in the UK pays 2.5% of all business rates, despite accounting for just 0.5% of rateable turnover – causing it to overpay £570 million.

To aid the recovery of pubs post-COVID, who were forced to close during three separate lockdowns and still operate under heavy restrictions until recently, the BBPA is urging the Government to radically overhaul the Business Rates system.

The call from the trade association comes as it responded today to HM Treasury’s consultation on Business Rates revaluations, and in particular revaluating Business Rates every three years.

According to the BBPA in its response to the consultation, the multiplier (the rate in the pound that is then multiplied by the rateable value of a property to produce its annual rates bill) has increased to a ‘staggering’ 51.2p today from 34.8p in the early 90s.

The BBPA therefore welcomes the Government’s aim to provide more regular revaluations for pubs in principle in the hope it will result in fairer rates for pubs due to more regular re-evaluations. However, it has concerns that the proposed changes to the current system of re-evaluations will mean rates payers have to pay in order to access a better and more transparent tax regime, which is irresponsible.

Ultimately, the Business Rates regime needs radical change, which is why the BBPA is backing the Long Live The Local campaign, which is calling for Government investment in pubs by reforming Business Rates, in addition to VAT and Beer Duty.

 

A British Beer & Pub Association spokesperson said:

“As things stand, pubs will overpay on Business Rates to the tune of £570 million a year. The bill for this will come through the post once the current relief on Business Rates ends in March 2022.

“Pubs overpaying on their business rates is fundamentally wrong. Especially as they were one of the most affected sectors by Covid and lockdowns. The Government should be supporting pubs’ recovery, not punishing them.

“As our sector begins its recovery, now is the time for radical reform of Business Rates.

“While increasing the number of Business Rates revaluations to every three years would be helpful in principle, the proposals from Treasury would mean rate payers have to pay in order to access a better tax regime, which isn’t right.

“Root and branch reform of Business Rates is essential to the future of our sector, which is why we are supporting the Long Live The Local campaign calling for reform of Business Rates in addition to reforming VAT and Beer Duty.”

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