PMA readers raging about their rates

The survey results paint a picture of licensees shelling out a significant chunk of their turnover as part of a system they feel is patently unfair.

For the majority, business rates were the largest expenditure after rent and staff costs; and more than half described rates payments as having a ‘major impact’ on their pub’s profitability.

In many ways, the findings should come as no surprise and reinforce the evidence from numerous industry studies highlighting the impact of property costs and taxes on the sector.

The Association of Licensed Multiple Retailers points to the fact the UK is the most highly taxed property market in Europe, and the trade is crying out for a rates regime that works for the many, not the few.

Dissatisfaction​

Respondents gave some thoughtful and thought-provoking responses to the question of system reform. Clearly there is huge dissatisfaction in the way rates are currently calculated, which many licensees feel disincentivises success and puts pubs at a disadvantage when compared with other businesses.

Alongside the calls to base pubs’ rateable value on profit, rather than turnover, there were suggestions that pubs that demonstrate a real and tangible value to their communities should benefit from a discount on their rates bill. The Campaign for Real Ale (CAMRA) has already hinted that it is investigating this area further.

To me, this sounds like an idea worthy of further exploration. Why shouldn’t a pub that is a long-standing local employer, is vigilant of its environmental impact, and plays an active role in its community benefit from a discount?

A more personalised and detailed valuation based on a pub’s individual circumstances would undoubtedly lead to a fairer and more mutually acceptable outcome.

Level playing field​

Interestingly, just one quarter of pubs that responded to the survey benefited from any kind of discount or rate relief, which shows what little meaningful impact the extension of small business rate relief — a key aim of the Better Rates for Pubs campaign — will have on the majority of pubs.

But it’s vital the Government listens to the coalition of voices championing the cause and grants that extension at the very minimum, if only for a symbolic gesture that it is heeding the concerns of the trade.

What is more important in the long-term is a fundamental review of the business rates system, which outlines options for reform that will lead to a fairer framework for all.

A level playing field is all we ask for, which does not punish licensees for hard work and success.

Let’s hope George Osborne — who proclaimed back in April that the historic beer-duty cut he bestowed in the Budget was “just the beginning” of Government help for the sector — starts to deliver on that pledge in his Autumn Statement next week.