Pub rateable values rise 23%
The average pub faces a 23% rise in its rateable value from 2010 — although the most they will pay is 11% more than this year's bill.
That's according to a survey of almost 3,500 — or 10% of — leased and tenanted pubs in England and Wales by licensed property agents Fleurets, revealed exclusively to the Morning Advertiser.
Fleurets' rating expert Michael Yass urged hosts not to panic, as actual business rates bills will not rise by the same proportion as rateable values.
Instead, bills will be offset by gradually phased-in rises, and a lower multiplier — this determines the percentage of a pub's rateable value that licensees will pay in business rates.
It's likely the multiplier, or Uniform Business Rate, will fall by 16% from around 48.5p/£1 to 41.7p/£1 in England. The Government is also expected to operate transitional relief in cases where rates have changed significantly, whether upwards or downwards.
In 2010, large pubs — those with a rateable value of £18,500, or £25,500 in London — which face a substantial increase in rateable values, would have to pay 12.5% extra, plus RPI. Since this year's RPI is -1.4%, hikes will be capped at 11.1%.
Increases will be staggered over the remaining four years. Yass said the reason the average pub's rateable value had increased by 23% was down to much of the data being collated before the smoking ban, which began in 2007. The Valuation Office Agency (VOA) carried out its revaluation in April 2008.
"While the VOA has made a concerted effort to gather significantly more trading and rental information than for previous rating revaluations, much of the detail might be outdated," said Yass.
Meanwhile the Welsh Assembly Government provisionally confirmed that it would reduce its business rate multiplier from 49p/£1 to 41p/£1.
A spokeswoman for the Assembly said it "is keen to look at ways to help businesses come through the recession". She added that the reduction meant "the majority of businesses in Wales will see a reduction in their bills before any small business rates relief is taken into account following the revaluation exercise".
In addition the Assembly plans to change the thresholds for small business rates relief "so that the total pot of money available to small business is not reduced as a result of the revaluation exercise".
Almost two thirds of Welsh businesses currently receive a reduction of at least 25% on their rates.
Concern
Reacting to news of the rates increases, Neil Robertson, chief executive of the BII, said: "We're extremely concerned about the situation. We've had a lot of calls from members about big increases in rateable values — some between 40% and 100%."
BII plans to run events offering advice on business rates in the new year.
"What we think is happening is that local authorities are trying to raise the same amount of taxes from fewer businesses. The net effect will be the closure of some businesses, while others will have their margins hit."
Meanwhile a group of licensees in Rochdale, Lancashire, are banding together under their local Pubwatch group to decide how to tackle big hikes in rateable values at pubs in the town. Mark Foxley, pubwatch chair and operator of three bars, said a lower multiplier and transitional rates "wouldn't swallow up the meteoric rises".
Simon Crompton, licensee at the Baum, faces a jump of 68%, from £18,000 to £30,250. "Everyone's thinking, 'that's someone's wage to get rid of — or we'll have to put prices up.'"
Campaigning MP Greg Mulholland has previously written to the Government with concerns over the new rateable values for pubs.
Mitigating factors
The effect of a lower multiplier
2005: 2010
Rateable value — £21,000: £25,750
Uniform Business Rate — 48.5p/£1: £41.7p/£1*
Rates payable — £10,185: £10,737
*estimated
