Business rates relief: why London pub operators aren't celebrating
Reported plans to lift the business rates threshold to £18,000 would help the smallest venues, but operators say bigger pubs will barely notice.
Next week's Budget (28 October) is expected to bring a change to business rates that sounds generous. Operators, though, are not rushing to the bar to celebrate.
What is reportedly planned
According to The Morning Advertiser, Chancellor John Healey is expected to raise the rateable value threshold at which businesses begin paying business rates from £12,000 to £18,000.
Reports suggest the change could take around 75,000 properties out of business rates altogether. That includes approximately 2,600 pubs, 2,500 restaurants and 1,600 cafés in England.
The reports follow a meeting between the Chancellor and hospitality and business leaders, including UKHospitality, ahead of the Budget. Discussions focused on rising operating costs and measures to support investment and growth. Healey has said the Government would look to give businesses “a bit of breathing space” at the Budget.
The view from the bar
Operators told The Morning Advertiser the measure would have a limited effect across much of the pub sector.
Tim Bird, of Cheshire Cat Pubs and Bars, was blunt. “It makes no difference at all to any of our businesses. It simply helps very small businesses avoid paying rates.”
Paul McAstocker, a multi-site London pub operator, said any support on business rates would be welcome, and that it would help those at the lower end of the rates. But many pubs already sit well above the proposed threshold. “Pubs like the Wooden Cross already sit well over the threshold. We need more than that as an industry,” he said.
Ayesha Kalaji, chef-owner of Queen of Cups and Estrella Damm Top 50 Gastropubs Chef of the Year, said the reported measure would not address what she viewed as the sector's principal tax burden.
One Budget measure, many bills
JD Wetherspoon founder and chairman Tim Martin cautioned against judging any single measure on its own. “Let's look at excise duty, employment costs, business rates, sugar taxes, fruit machine duty and everything else together and not get drawn into a PR game,” he said.
The Treasury declined to comment directly on the reported changes. An HM Treasury spokesperson said decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals. The department added that the Chancellor remained focused on giving families and businesses “a bit of breathing space”, supporting British jobs and driving growth while meeting the Government's fiscal rules.
The Department for Business and Trade referred questions on the reported changes to the Treasury.
What it could mean for your local
The figures point to a split. Very small venues could see a real saving, if the reports prove right. Larger pubs, the sort with sizeable rateable values, would see little change, and operators say they want wider tax reform.
The Budget lands on 28 October. Until then, it is all reported plans rather than confirmed policy.
Know before you go
- Budget date: 28 October
- Reported change: rateable value threshold from £12,000 to £18,000
- Figures relate to England
Sources: The Morning Advertiser
