ALMR Analysis Of Licensee Of The Year Pubs Highlights Broken Business Rates System

New analysis by the ALMR – the leading voice for the UK’s eating and drinking-out market – has starkly highlighted again the unfair and imbalanced nature of the current business rates regime.

A study of the rateable values (RVs) of the six finalist pubs in this year’s Licensee of the Year competition, run by the British Institute of Innkeeping, has revealed that collectively their pubs’ RV has risen by 57%.

The Castle at Edgehill, Oxfordshire run by the winning licensee, Mark Higgs, is enduring a triple-digit rise (258%) following this year’s revaluation process and by 2020/21 is scheduled to pay more than double its current business rates bill.

Other notable increases include the Kings Head, Thursley, Surrey, which has experienced a 133% increase and Merchants 1668, Lancaster which has risen by 86%.

Overall, under the current regime, by 2020/21 the six pubs will be paying 64% more in business rates than before the revaluation.

Mark Higgs said: “The Government is penalising successful operators through the current unfair rates system. I have grown trade and invested significantly in my pub and now I am faced with a steep increase in my rates bill. That just isn’t right. The system needs a huge overhaul and a fairer approach to hospitality businesses to encourage growth must be implemented as quickly as possible.”

ALMR Chief Executive Kate Nicholls said: “Our analysis once again brings into sharp focus the current unfair and broken business rates system. It is a regime that is rigged against hospitality businesses, penalises success and stifles investment and growth as higher turnover invariably leads to higher rates.

“These six outstanding licensees run exceptional pub businesses that contribute greatly to the local community and have been recognised as some of the best the country has to offer. How can it be right that their success is penalised by significant hikes in their rates bills which threaten to hamper future growth and job creation?

“It was disappointing to see no specific measures on rates announced in the recent Queen’s Speech.  The ALMR will be keeping up the pressure for wholesale reform and pressing ministers for assurances on a commitment to change in the Budget later this year.

“If the Government is serious about supporting pubs and values the economic and social contribution they make, then it must push forward with reform as soon as possible.”

Emily Francis, Head of Business Rates at rating experts BNP Paribas Real Estate, said: “This research clearly illustrates how operators are hit with significant increases in their rates following a revaluation or investment in their property and business. All too frequently, the result is that people who work hard to create successful businesses end up paying excessive rates – good operators are penalised while poor operators reap the benefits.

“The way that licensed leisure premises are assessed can exacerbate the issue, as often there is a clear misunderstanding of how a property’s value – based on the notional concept of ‘fair maintainable trade’ – should be calculated. We believe that a better understanding of the industry, and of how operators achieve their level of turnover, is required by the government and its surveyors.”