Rateable values could allow for ban

Rateable values could be reduced to take into account the smoking ban's impact on potential trade, new guidance from the Valuation Office Agency (VOA) suggests.

Wet-led land-locked pubs are likely to have the greatest success in achieving a reduction in rateable values when appealing against current levels.

Following legal advice, the VOA has updated its guidance on the valuation of pubs for business rates purposes, to include the impact of the smoking ban.

Business rates for pubs are based on rental values, and according to a VOA spokesman, "a key factor in the setting of pub rents is trading potential, therefore any review by the VOA would consider all factors that have a positive or negative impact on trade levels."

He added that it would be essential to "isolate the impact of the ban" and to "disregard changes in trade levels caused by economic factors such as the price of alcohol in supermarkets or individuals economising due to financial pressures".

David Morgan, managing director of Cookseys DMP, said that nationwide, "heavily wet-led pubs have seen a fall between 8% and 20% in trade because of the ban".

The problem with appealing the rateable value is "that you have to show a sustainable and continuous loss of trade over a couple of years — which would mean we won't see any appeals until July 2009".

The VOA has admitted already having reduced rating assesments in a number of cases but warns that each case must be considered on its own merits.

For more information on how this could affect your premises, contact your local VOA office.

Further information on appealing against rateable value is available from here​.