BBPA rejects GMB rent collusion claims
Claims by trade union GMB that the British Beer & Pub Association (BBPA) has effectively stitched up the rent assessment process for tied tenants were rejected by the trade body last week.
The GMB said that in its talks with the Valuation Office Agency (VOA) - the body which assesses rateable values for businesses - the BBPA had agreed on a formula "which short-changes both the tenants and the taxpayer to the benefit of the pubcos".
The union said that it was writing to the Treasury asking that it investigates why 'dry' rents levied by pubcos on their tied tenants were up to four times more than the VOA's assessment for a given pub's rateable value.
"We are requesting that they ask the VOA to explain this discrepancy between actual dry rents and the rent calculated by the VOA using the formula agreed with the BBPA," said Hayley Brennan, the GMB's lead officer for tied tenants.
She said the GMB had several examples of where the difference between VOA calculations and pubco rent bills ran into thousands of pounds.
"In the case of my pub in Portsmouth the VOA asses the ratable value as £8,000 based on their assessment of what is a fair rent using the formula agreed between VOA and BBPA representing the pubcos.
"Yet my pubco, Punch Taverns, are charging me a dry rent of £29,000 for the pub plus a wet rent on top."
"My pub is typical of the discrepancy between what VOA assess is a fair open market rent and actual dry rents charged by the pubcos," she added.
However, the BBPA said the GMB's claims were "without substance or foundation".
"All pubs are assessed for rates by the VOA using the same principles as for all other commercial properties," a spokesman said.
"The VOA is an executive agency of HM Revenue & Customs. To even suggest it has in some way colluded to artificially manipulate the valuation of pub properties in order to reduce the taxes payable to the tax authorities is devoid of both credibility and substance.
"The BBPA has not agreed any formula with the VOA for the calculation of rates. It would be entirely inappropriate to do so," it added.
A spokeswoman for the VOA said it did not apply such a formula.
"It must be remembered that when comparing rents and rateable values there is a whole variety of factors that need to be considered, since it is quite possible that the basis of the rent is at variance with the assumptions used for the purposes of determining rateable value," she said.
The VOA added it had consulted with a number of trade bodies, including the BBPA and the Association of Licensed Multiple Retailers. "It is important to be in possession of a full understanding of the potential for differences in the basis of assessment for the purposes of rating compared to that used in the determination of rent under any particular lease," said the spokeswoman.
"It is not helpful to try and draw direct comparison between the level of each without consideration of these differences," she added.
One industry source said that in highlighting the rate/rent situation, the GMB's campaign could expose hundreds of pubs to revaluations which would result in rate increases.
