Amidst ongoing concern over the cost of business rates to pubs, the BBPA has submitted a series of proposals to the Government focused on helping smaller pub premises. The proposals are contained in a submission to the Department for Communities & Local Government and HM Treasury, following their issue of a discussion paper on the future of business rates last month.
The BBPA’s core proposal involves raising the threshold at which small businesses are defined. At present, the Uniform Business Rate has a rateable value (RV) threshold of £18,000 (£25,500 in London).
In the 2013 Autumn Statement, Retail Relief was introduced for properties with RVs of £50,000 and below. This threshold could be used for the Uniform Business Rate split between large and small businesses , says the BBPA. For a new threshold to have a positive impact, there would probably need to be a wider differential between the rates bills for large and small businesses.
In a range of proposals, the BBPA also wants radical changes which would force local authorities to be more transparent, and list the reliefs that are available to businesses on their bills. The paper also reiterates the need for revaluations to keep up-to-date with trends in the market, and the continued use of a ‘turnover’ approach to determine an equivalent rental value as the most suitable option for the pub sector. It should be made easier for pubs to be revalued if their economic circumstances alter.
The BBPA acknowledges that some of these measures would come at a cost. There would need to be either a reduction in revenue generated from the business rates system, or larger businesses would need to shoulder more of the burden. Alternatively, more businesses such as those which operate on-line businesses would have to be brought within the scope of the business rates system.
Brigid Simmonds, BBPA Chief Executive, comments:
“In the past year, the Government has taken action to help pubs struggling with their rates bills. However, at up to ten per cent of pub business costs, rates remain a huge burden, and more reform is needed to get the burden down. I hope The Treasury makes this issue a priority.”
“We also need to make it easier for pubs to be revalued if their economic circumstances alter and not just due to the current definition of a ‘material change’.”