Business rates bills for the 17 pubs and restaurants recently highlighted as Michelin star worthy are set to rise by a mouth-watering £989,186 over the next 5 years according to data from CVS Business Rent & Rates Specialists.
Their analysis shows that the 17 Michelin star pubs featured in the Eating out in Pubs guide 2017 had a combined Rateable Value of £687,750 based on the last property assessment in 2010, which has formed the basis of rates bills for the last 7 years, but this has risen dramatically to £1,175,775, a 71% increase under the Revaluation which came into effect on 1st April.
The award-winning restaurants, the majority of which are located in Berkshire and Oxfordshire, paid just £324,163 collectively in rates liabilities in 2016/17. According to CVS, their bill is set to increase over the next 5 years to £522,001 per year on average allowing for the effects of transitional relief and forecasted inflation, representing an increase of £197,837 per year.
As a result, CVS project that over the next 5 years, allowing for transitional relief and forecasted inflation, the 17 Michelin star pubs face an almost £1Million tax hike.
The pub facing the biggest increase in rates bills is the Harwood Arms in London, which is set to face a hike of almost £200,000 over the next 5 years.
They are closely followed by the Hinds Head Hotel, Berkshire and The Hand and Flowers, Buckinghamshire, who face hikes in business rates bills over the next 5 years of £159,428 and £152,360 respectively.
The only business within the highly esteemed 17 not classified as a Pub Restaurant is The Wild Rabbit in Chipping Norton, which instead is listed at the Valuation Office Agency as a Hotel (4* & above). Its rates bill will still increase by £65,000 over the next 5 years.
Mark Rigby, chief executive at CVS, said:
“It’s already a tough time for pubs and restaurants, and these in particular are paying the price of success.
“There could be an argument for the occupiers of these establishments that they qualify for ‘over trading’, meaning that the landlord or occupier is an exceptional trader and trading at levels that a normal operator could not attain. This over trading element should be reflected in the Rateable Value, and subsequently, will trickle down into reduced rates liabilities.
“It’s important for all landlords and restaurant owners to know that – despite Government reforms which disadvantage ratepayers – it is possible to challenge these new assessments with professional support.”