Tax & admin · 11 October 2017

Hospitality industry welcomes Liberal Democrat calls for business rates cap

One report predicted some London pubs would have to serve an additional 22,500 pints a year to fund a property tax rises
One report predicted some London pubs would have to serve an additional 22,500 pints a year to fund property tax rises

A trade body representing the UK’s hospitality sector has praised calls from the Liberal Democrats to introduce a 12.5 per cent cap on business rates rises for pub landlords.

At the Liberal Democrat conference in September, the party put forward a paper challenging business rates rises for high street businesses and proposed a fixed cap on tax increases for pubs.

Announcing the proposal in a speech, the party’s Lewes candidate, Kelly-Marie Blundell, claimed the current property tax system had “savaged” pubs across Britain, with the recent revaluation adding 200 per cent onto some landlords’ tax bills, and called for government to introduce a 12.5 per cent cap for pubs that matched the offer already existing in Scotland.

Business rates increases are expected to raise £23.9bn in England this year, with over 15,000 pubs predicted to face an average tax increase of 19 per cent.

Read more: Unpaid business rates sees one owner face a week face 90-day prison sentence

Commenting on the plans, party leader Vince Cable said a business rates cap would “protect local pubs from crippling increases to their tax bills”.

He added: ““Many pub owners are struggling to cope with huge hikes to their business rates, with some having to lay off staff or even close their doors altogether.

“Ministers need to get a grip and give struggling business owners the help they need before it’s too late.”

Welcoming the party’s position, the Association of Licensed Multiple Retailers (ALMR), Britain’s sole trade body representing food and drink business owners, claimed a business rates cap would send a message of clarity to small firms.

Kate Nicholls, ALMR chief executive, said recent revaluation had seen many eating and drinking venues “hit hard by huge increases”, with pubs particularly at risk.

“A good first step would be for the chancellor to announce a cap on business rates increases for pubs and the wider eating and drinking out sector including restaurants, bars and nightclubs,” she said.

One report found that a pub in London could be forced to serve an extra 22,500 pints every year to cover the increase.

Nicholls added: “The government would do well to listen to Vince Cable’s call for a cap, otherwise venues will continue to face massive increases in their bills, undermining investment and jobs.

“A cap on business rates increases can provide a sense of stability and clarity for businesses, crucial at this time of political and economic instability, before a thorough rethink of a broken and inefficient rates system that is unfit for purpose.”

In March’s Spring Budget, chancellor Philip Hammond announced a special £25m support package for the most pubs facing the greatest increase in bills. However, the government was forced to intervene after local authorities had struggled to deliver rate relief to severe cases.

Appeals deadline

It was recently reported by commercial rents specialists CVS that the government was planning to introduce a cut-off for appeals against individual business rates increases.

At a fringe event at the Conservative Party conference, business secretary Greg Clarke said a fundamental review of business rates was at an “advanced” stage, and a fixed time limit for appeals could be introduced as early as the Autumn Budget in November.

Find out everything you need to know about the business rates appeals process

Sign up to our newsletter to get the latest from Business Advice.


 
TAGS:

ABOUT THE EXPERT

Simon Caldwell is a reporter for Business Advice. He has a BA in politics and communications from the University of Liverpool, and previously worked as a content editor in the ecommerce industry.

Q&A

If you’ve found the article above useful, but have a more detailed and bespoke question, then please feel free to submit a query to our expert. We at Business Advice will get in contact with them on your behalf and arrange for a personalised response. These questions and answers will then be collated on the site for any other readers who have similar queries.

Ask a question

From the top