BBPA warning over pub business rates calculations

11-Jul-2012 - Last updated on 12-Jul-2012 at 07:50 GMT

The British Beer & Pub Association (BBPA) has warned licensees to be careful what they wish for when asking for pub business rates to be calculated in the same way as shops.

In a letter to the Publican’s Morning Advertiser, William Robinson, director at Robinsons brewery and chairman of the BBPA’s property panel, said that if rates calculations were the same for both pubs and shops, this would take into account beer gardens, which would not be used in a rain-affected summer.

“Pub profitability is not related to size,” wrote Robinson. “Large pubs can run at a loss and small pubs can make large profits.

“It would surely not be fair to pay business rates on the size of your beer garden, for example, particularly in a summer like this when it is rarely used.”

The BBPA has written to the Government asking for a pub’s level of trade to be taken into account when considering business rates appeals.

Until April 1990, business rates could be appealed if trade fell, but this also caused bills to rise if turnover grew. However, this clause was withdrawn after lobbying from the trade.

Rates revaluation takes place every five years. The last one was in April 2010, reflecting rates in April 2008, which was just before the economic downturn took a real hold on the licensed trade.

“It would be much better for pubs if a fall in trade could be reflected in a rate reduction at the end of the year, rather than having to wait five years for another revaluation,” the letter states.

“The BBPA has recently approached the Department for Communities & Local Government (DCLG) to ask for its view on the possible reinstatement of this right.”

The letter follows several stories by the PMA on pleas from licensees demanding a change in the way business rates are calculated.

David Morris MP has asked the Chancellor to “harmonise” business rates for pubs to “the normal ground rates applicable to other small business premises”.

Last month, business secretary Vince Cable’s parliamentary private secretary Tessa Munt also voiced concerns on the issue. She vowed to introduce a Bill to increase rates for larger businesses “by a fraction” to “remove the burden from our smaller businesses altogether”.

The BBPA has also called on the DCLG to remove the disincentive to diversify if a pub offers a genuine community service. “Increases in turnover provided by a shop, library, meals-on-wheels or post office should not result in an increase in rates,” the letter states.

Read our guide to how pub business rates are calculated.

Download the full letter by clicking on the link below