Hope for rural business rates cut after licensee anger

Pubs classed as rural businesses are entitled to 50% relief on their rates. But since George Osborne introduced 100% rate relief​ for businesses with a rateable value of less than £12,000 in this year’s Budget, small rural pub licensees have been left scratching their heads after discovering they don’t qualify for the full discount.

Current legislation dictates that where ratepayers are eligible for both small and rural business rate relief, they should receive rural.

Hope

But there is hope for licensees, after pubs minister Marcus Jones indicated he would look into amending legislation to give rural pubs the full relief.

• Are you a small rural pub? We want to hear from you​​

A spokesman for the Department for Communities & Local Government told the Publican’s Morning Advertiser​ it would look into amending rural rate relief following changes to small business rate relief, though councils already have the power to top up rural relief to 100% in certain situations.

Pete Gardener, licensee of the Horseshoe Inn, in Tresparrett, Cornwall, labelled the current system “senseless”.

He said: “A small rural business needs more help than a small urban business as our footfall is far less. We have to compete with the pubs in surrounding tourist areas on retail prices, but pay more for our stock, have more wastage and sell far less because we are so small and not in a tourist area.”

He said the difference in payments was a tough pill to swallow after retail relief was scrapped earlier this year, costing him £1,500 a year​.

'Unfair'

“The aim of increasing small business rate relief several years ago was to help small businesses survive, but it seems that small rural businesses are being treated unfairly,” he added.

Gardener approached Cornwall Council to dispute the system, but was told the policy was dictated by central Government and it could not offer him further discounts until legislation was altered.

He said he was “incensed by the injustice” of the “ludicrous” policy and is now refusing to pay his rates, and urged hosts in similar situations to campaign for change.

Andrew Markland, licensee of the Kirkstyle Inn, Brampton, Cumbria, was stunned when he found out he would pay more as a rural pub than city equivalents.

Pubs minister

Assuming this was an unintended consequence of the Budget, Markland contacted his local MP who in turn spoke to pubs minister Jones.

In correspondence, Jones confirmed: “We will certainly look at amending [legislation] now small business rate relief is more generous.”

The Association for Licensed Multiple Retailers explained that councils are able to apply for rural businesses to receive 100% relief.

Chief executive Kate Nicholls said: “Part of the problem is that many businesses are unaware that they are entitled to further support from their councils.

“Local authorities need to be much more proactive in the way they engage with their businesses. They also need to do more to support those companies that drive growth in local economies.”

The ALMR and British Beer and Pub Association have called for changes to legislation, allowing small business rate relief to supersede rural.