UK Pubs Win: Government Cuts Business Rate Hike
The UK government backs down on business rate hikes, cutting bills for thousands of pubs. Industry leaders call it a lifeline for struggling hospitality.
The government is set to announce a U-turn on planned increases to business rates bills for pubs.
In the coming days, the government is expected to announce that it will change the way business rates for pubs are calculated, resulting in smaller bill increases.
Treasury officials say they have recognised the financial difficulties faced by many pubs following sharp increases in the rateable value of their premises.
The move comes after pressure from landlords and industry groups, including a campaign that saw more than 1,000 pubs ban Labour MPs from their premises.
It is also understood that the Treasury is prepared to relax licensing rules to allow for longer opening hours and more pavement space for drinking.
In her November budget, Chancellor Rachel Reeves reduced the business rates relief introduced since the pandemic from 75% to 40% – and announced that no relief would be available from April.
At the same time, large upward adjustments to the rateable value of pub premises meant landlords faced significantly higher rates bills.
A campaign to mitigate the impact of these increases has been gathering pace in recent weeks, with pub owners and industry groups lobbying for greater support.
A pub's business rates bill is calculated by multiplying the rateable value of its premises by a multiplier.
The government has already provided some relief by reducing the multiplier for pubs, and is likely to reduce it further.
Alternatively, they could increase the £4.3bn "transitional relief" fund, which was introduced to mitigate the impact of withdrawing support after the pandemic.
Industry groups welcomed the news of additional relief.
Emma McClarkin, chief executive of the British Beer and Pub Association, said it was "potentially a huge win" for the sector. He said: “This will save local jobs and means pub owners can breathe a sigh of relief.”
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Kate Nicholls, chair of UK Hospitality, which represents the industry, said the relief should apply not just to pubs but to all affected hospitality businesses, including cafes and restaurants.
She said: “We need a solution for the whole of hospitality, which is why the government should implement the maximum possible 20p reduction in the multiplier for all hospitality properties.”
Reversing the recent budget measure will be seen by many as another U-turn after backtracking on winter fuel payments, disability benefits and inheritance tax on farms and family businesses. Shadow Business and Trade Secretary Andrew Griffith said the change showed that Rachel Reeves’ budget was “falling apart”.
He said: “Labour made a mistake by attacking pubs and now they’ve been forced into another humiliating U-turn.”
The rates relief during the pandemic only applied to hospitality businesses in England.
Scottish businesses are waiting for next week’s budget there to see what stance the Edinburgh government will take on the issue.
Pubs there will be hoping the Scottish government follows the UK government’s lead in offering some relief.
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