Tax warning to pubs opening new businesses

Licensees thinking of offering other business services in their pub are being urged to check with the Valuation Office Agency first.

The warning has come from Lorraine Froggatt, of the Windmill Inn, in Heage, Derbyshire, who is being forced to pay a separate rates bill after opening a hairdressers at her pub.

She was left shocked by the extra bill because she was not charged extra when previously running a Post Office on site.

"It's very frustrating," she said. "With pubs closing everyday you would think the authorities would take their hat off to anyone trying to diversify. You need to be aware of the pitfalls."

The pub, which also incorporates a chip shop, was forced to close its Post Office in November due to government cutbacks - but decided to introduce the hairdressers last month to attract new customers.

But Lorraine has vowed to continue running the hairdressers despite the extra rates bill.

A spokeswoman for Amber Valley Borough Council said: "As a consequence of this change in the use of the premises, the Valuation Office Agency is currently reviewing its assessment of the rates paid by the landlord of the property.

"This is standard procedure that is applied when any business premises has a change of use."

John Longden, co-ordinator of Pub is the Hub, which helps pubs to diversify, said the valuation office is often sympathetic to pubs that have diversified. "Such schemes do not always generate a profit," he said. "My advice would be to discuss it with the valuation office before you go ahead with a scheme like this."