The British Beer & Pub Association (BBPA) has responded to the Government consultation on transitional arrangements for business rates in England, affirming its support for the introduction of a transitional period of rate relief.
The BBPA has supported ‘option 2’, which sees medium-sized businesses (£20,000 to £100,000 rateable value) receive preferential treatment, and is proposing that ‘large’ pubs, that potentially face a 45 per cent rates hike in year one, should be redefined for transitional relief with a rateable value (RV) of over £200,000. This is particularly an issue for multiple pub operators in London & the South East.
Other measures proposed include allowing for flexible caps at local level, and a review of over-trading provisions to ensure that successful businesses are not being unfairly penalised. As business rates for pubs are set on turnover, the BBPA argue that each of their proposed measures would help keep costs manageable for pubs in the coming years.
Welcoming the application of Small Business Rate Relief (SBRR) from year one, which will provide a 100 per cent discount for pubs with an RV of £12,000 or below, the BBPA also strongly advocates that SBRR should take precedence over Rural Rate Relief, and that the maximum eligible relief should be automatically applied.
Whilst reforms announced in Budget 2016 will benefit pubs, the BBPA believes that the sector remains overtaxed, with pubs paying an additional £500 million each year. Even with transitional rate relief applied, the BBPA highlight that, overall, the pub sector bill will be £40 million higher, or £1,000 per pub.
Brigid Simmonds, Chief Executive, BBPA, comments:
“The BBPA is broadly supportive of the introduction of a transitional period of rate relief. We support measures to offset some of the cost of increases from the current revaluation and welcome the full application of Small Business Rate Relief for the smallest pubs; it is also vital that SBRR takes precedence over Rural Rate Relief and that local authorities apply the right reliefs from the start.
“However, the BBPA holds severe concerns about the impact on larger pubs of a hike of up to 45 per cent in business rates in year one. This is why we have put forward a series of proposals that could mitigate this.
“Our proposals for flexible caps at local level, a review of over-trading assessments and the redefinition of large pubs for transitional rate relief would all help mitigate costs for larger pubs. Pubs are already highly taxed, with 34 pence in every pound going to the taxman, and despite a high turnover, remain relatively marginal businesses.”