Tax & admin Fred Heritage · 30 October 2017
15 pubs a week forced to close since April’s business rates revaluation
Some 15 pubs each week in Britain have been knocked down or converted into other types of premises since the business rates revaluation came into effect on 1 April this year, new research has revealed. Since the revaluation, between 1 April and 31 September 2017, 390 pubs have disappeared? from official ratings lists, according to analysis from business rates specialists CVS. Removal of the pubs from the ratings list means theyve either been demolished or converted into other premises, such as homes or shops, by their owners for tax reasons, CVS have claimed. Pub owners have seen the rateable values of their premises increase by 204m to 1.637bn in total a growth rate of 14.24 per cent in the first business rates revaluation to take place in the UK in seven years. As many as 20, 514 pubs in England are set to see property tax rises amounting to 59.68m in April 2018, an average rise of 2, 909 per pub, according to CVS. Chief executive of CVS, Mark Rigby, has encouraged the chancellor, Philip Hammond, to grant pub owners a helping hand? in his upcoming Budget announcement. Hammond could freeze the rise of inflation whilst maintaining the pub discount? rate of 1, 000 per pub, for example. Rigby added: “One in five pubs closed during the last tax regime, leaving the lowest ever number of pubs. Whilst 15 pubs a week since the tax changes have been lost, the reality is that number is considerably higher as empty pubs still pay rates after a three months exemption following closure. Business rates are set to increase annually in line with the UK’s Retail Price Index (RPI), which was set at 3.9 per cent last month, the ONS reported. However, under the terms of the latest revaluation, transitional business rates relief, due to be phased in gradually over the next five years, should limit the impact of large increases to pub landlords? bills. Transitional business rates relief caps? differ depending on the size of a business’s premises. In the 2018/19 tax year, the government has set the transitional caps at 7.5 per cent for smaller properties, 17.5 per cent for mi-sized premises and 32 per cent for large properties. September’s rise in RPI is then factored in to the amount owners pay in business rates. Despite these caps, the analysis has shown that 6, 696 small pubs will see their business rates bills rise above inflation, whilst 5, 970 small pubs will see increases in their rates bills of more than 15% next year, given the loss of their 1, 000 pub discount.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.