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A better deal for pubs

By thirsty hack Ignatius Rake

Posted November 19, 2015
UK pub bodies call on chancellor for fairer deal for pubs.
Save our pubs! Relief for pubs is critical, say industry bodies. Public domain

UK pub bodies call on chancellor for fairer deal for pubs.

Key pub industry bodies have jointly written to UK chancellor George Osborne MP, calling for further action to secure a fairer deal for pubs in his Autumn Statement this coming November 25.

According to a press release, the letter is signed by representatives of the British Beer & Pub Association (BBPA), the Campaign for Real Ale (CAMRA), the Association of Licensed Multiple Retailers (ALMR), the Brewing, Food and Beverage Industry Suppliers Association (BFBI), the British Institute of Innkeeping (BII), the British Soft Drinks Association (BSDA), the Federation of Licensed Victuallers Associations (FLVA), the Guild of Master Victuallers (GMV) and the Society of Independent Brewers (SIBA).

In it, they set out three business rates priorities for pubs:

• Freeze the business rates multiplier, benefiting all pubs and worth around £5m ($3.3m) to the sector;

• Extend small business rate relief for another year, benefitting a third of pubs, or 15,000 pubs in total; and

• Apply Retail Relief – a scheme that provides a discount for pubs with a rateable value of £50k or less - for another year and increase the discount to £2,000 per annum, per pub.

Stark figures in the letter point to BBPA research showing that pubs are particularly disadvantaged by the current business rates, paying around 2.8% of all UK receipts from this tax, despite accounting for just 0.5% of turnover.

This, the BBPA says, is "a hugely burdensome overpayment of £500m per year".

The letter also makes clear that relief for pubs is critical, given the growing degree to which pubs are now disadvantaged, as result of delays to the rates revaluation process, which will see new rateable values come into force in April 2017.

"More action from the government in the Autumn Statement is needed, as pubs are hugely overburdened," says BBPA CEO Brigid Simmonds.

"In the longer term, we need to ensure that the rates burden can be spread across a much wider range of business and across the whole economy."

"The businesses that are driving growth across the UK's high streets are bearing a disproportionate burden," adds ALMR CEO Kate Nicholls.

"The government must act decisively to ensure a fair and flexible system that treats all businesses equally in the way they are assessed and encourages success."

The full letter reads:

Dear Chancellor,

Pubs, business rates, and the Autumn Statement

We are writing as a coalition of pub owners and operators, suppliers to the trade and pubgoers to highlight the cost of business rates to the industry and propose measures that could be implemented in the Autumn Statement to reduce the burden of this tax on community pubs.

The pub industry in England pays around £600m in business rates, an average of over £13,000 per pub each year. Pubs are particularly disadvantaged by business rates, paying around 2.8 per cent of all UK receipts from this tax, despite accounting for 0.5 per cent of turnover - an overpayment of £500 million per year. The tax makes up around 10 per cent of pub business costs. Indeed, a new study from Oxford Economics has found that per pound of turnover, business rates paid by pubs were second highest among 67 sectors studied.

The industry has welcomed the Government's support on business rates over the last few years which has provided a vital lifeline to many pubs, and helped others invest in their local communities and staff. However, the level of taxation remains too high and many of the reliefs are only temporary.

We therefore call on the Government to:

• Freeze the business rates multiplier for 2016/17

• Extend Small Business Rate Relief for a further year

• Provide Retail Relief for an additional year and extend the discount to £2,000 per premises

These measures are particularly critical in the last year before the revaluation as we feel current rateable values are disadvantaging pub businesses against other business types. The industry is hopeful that proposals for reform of business rates and the next revaluation will create a fairer taxation environment for pubs from 2017 but some will not survive that long without support.

We strongly believe that these measures will help to sustain the UK pub industry in its fragile recovery from the effects of the recent recession and the damaging rises in beer duty, particularly from 2008 to 2012 under the beer duty escalator. It will also support the sector in adjusting to the increase in costs that are anticipated as a result of the introduction of the National Living Wage, energy policy reform and the Apprenticeship Levy.

Yours sincerely

Brigid Simmonds OBE, Chief Executive, British Beer & Pub Association

Kate Nicholls, Chief Executive, Association of Licensed Multiple Retailers

Ruth Evans, Chief Executive, Brewing, Food and Beverage Industry Suppliers Association

Tim Hulme, Chief Executive, British Institute of Innkeeping

Gavin Partington, Chief Executive, British Soft Drinks Association

Colin Valentine, CAMRA National Chairman

Martin Caffrey, Chief Executive, Federation of Licensed Victuallers Associations

Alex Frear, Chairman, Guild of Master Victuallers

Mike Benner, Chief Executive, Society of Independent Brewers

See also Beer duty cut again, posted 18/3/15.

Ignatius Rake
is a freelance journalist, geographer, illustrator and world traveller who has visited more than 70 countries on six continents. He has written on numerous subjects for various publications and is available for hire and commissions. He can be contacted by email here.

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