Craig Thatcher, whose wife Paula Jones runs the Crown & Horseshoe, Bristol, said he feels the pub has been unfairly designated the lower grant.
The Government is offering grant funding of £25,000 for retail, hospitality and leisure businesses with property that has a rateable value between £15,000 and £51,000.
There is also a small business grant of £10,000 for all business in receipt of small business rates relief or rural rates relief.
The pub has a rateable value that is rounded down to £15,000 by the council and so the Treasury confirmed that the pub will receive the £10,000 grant. It said pubs with rateable values of between £15,001 and £50,999 were eligible for the £25,000 grant.
However, Thatcher said the site does not receive small business rates relief or rural rates relief that pubs with rateable values of up to £12,000 receive and, therefore, is unfairly disadvantaged.
Unfair situation
The Treasury said the design of the policy had been kept simple to ensure it is deliverable at pace amid the unprecedented coronavirus situation.
Thatcher said: “It's so unfair because it’s one penny.” He feels that other pubs in this area, which have similar operational costs during this period, will have an upper hand when preparing to reopen and moving forward after the social distancing regulations are relaxed.
He told The Morning Advertiser: “My wife’s not getting paid, it’s a pretty dire situation, it probably will be the end of our business.
“It’s a serious cut off, we’re not talking about a few quid. We’re talking about £15,000. It will make a difference for not just myself but for other pubs in terms of going under.”
Robert Hayton, head of business rates at Altus Group and one of the experts on The Morning Advertiser’s #UnitedWeStand advisory board, explained how the grant funding scheme was designed by reference to small business rates relief (SBRR) thresholds.
He explained “SBRR provides that, for those properties with a rateable value of between £12,001 to £15,000, relief is tapered going down gradually from 100% to 0%.
“For these properties, including those with a rateable value below £12,000 that enjoy a full exemption, the grant will be £10,000.
“The grant only rises to £25,000 for those properties outside the threshold criteria for SBRR, ie, a rateable value over £15,000.
“Therefore, a property with a rateable value of exactly £15,000, without the retail discount or rates holiday, are at the threshold at which normal business rates become payable with the tapering having been extinguished but are now being constrained to the lower grant funding despite having had no benefit at all from SBRR.”
Winners and losers
Hayton said the predicament faced by the Crown & Horseshoe highlighted a clear unfairness.
He said: “This is an anomaly and obvious unfairness in the design of the grant funding scheme. It is particularly harsh on those businesses occupying a property with a rateable value of exactly £15,000.
“With thresholds, there will always be winners and losers, and these are found at the upper end too. In this case, the problem could be substantially alleviated if the Government also tapered the £10,000 and £25,000 grants on rateable values between £12,000 to £15,000.”
There are 253 pubs in England with a rateable value of exactly £15,000 facing the same situation as the Bristol pub, according to Hayton. This is out of a total of 3,657 retail, leisure and hospitality premises with that exact value.
Thatcher said he has contacted the Treasury, Department for Business, Energy & Industrial Strategy (BEIS), local council authorities, but has not had a response he feels is adequate.
He said: “Nobody will speak to me on the phone. It's very frustrating.”