Shock 550% rates bill hike for hosts

Licensees across the country are receiving rates bills up to 550% higher than last year.

The shock rises are a result of the Government scrapping transitional rate relief, a move that affects bills from 1 April.

According to the Local Government Association, £100m a year of transitional relief used to be available to businesses. They must now pay their full liability.

Thousands of firms had been paying reduced bills for years — thanks to transitional relief, which has been in place since 1990.

The LGA is calling for the extension of the relief to protect worst-affected businesses. The Government announced relief would end in 2004, but those who took on pubs after this could be taken unawares.

Adrienne King, of the Marston's-owned Red Lion in Gilmorton, Leics, took over her pub in May 2006. Her bill jumps from £169 to £922 per month — a 546% rise.

"This could put me out of business," said King. "The difference is about the amount of profit I was expecting to make this year."

At the Dovecote Inn, in Laxton, Notts, David Brown's monthly bill increased by 300%, from £418 to £1,273. "We hold out little hope of any reduction or relief. A letter has been sent to our MP and we also plan to write to Prince Charles as patron of Pub is the Hub — our pub is one of a handful owned by the Crown Estate."

Last week MA reported that Peter Wilson, host of Enterprise Inns-owned Hare & Hounds in Worthing, wrote to the Chancellor about the £8,855.84 added to his bill. He has now also written to Shadow Cabinet member William Hague, who is "very interested".

Margaret Eaton, chairwoman of the LGA, said: "It's clear that a decision about ending this relief was made while the economy was still booming.

"In the new environment, it's not realistic to expect many businesses to deal with this sharp rise."

Tony Payne, chief executive of the Federation of Licensed Victuallers Associations, said: "Government says it wants to help small firms, and all the time it's another kick in the teeth. They should reconsider to keep some businesses open."

Edward Wright, partner at chartered surveyors Lawrence Tattersall, said many licensees had been in touch: "It's a very nasty problem. It's been a bit of a time bomb."

Although businesses can't appeal against the loss of transitional relief, some could mitigate its effects by appealing the rateable value of their pubs in the light of the smoking ban.