Business rates bombshell leaves pubs facing ruin

Business rates bombshell leaves pubs facing ruin
By: dailymail Posted On: October 10, 2024 View: 104

Caution: Rachel Reeves (pictured) has been warned that pubs and other venues will close if the Budget does not address concerns about business rates, alcohol duty and workers' rights

Rachel Reeves has been warned that pubs and other venues will close if the Budget does not address concerns about business rates, alcohol duty and workers' rights.

As she weighs up her options, the Chancellor was urged by hospitality chiefs not to hammer the sector as it recovers from shocks including the pandemic and rise in energy prices. 

Preventing a near-£1billion increase to business rates next April should be top of the to-do-list on October 30, according to a high-profile Labour adviser as well as the bosses of UK Hospitality and Greene King. 

Sacha Lord, chairman of the Night Time Industries Association, which represents hundreds of pubs, nightclubs and bars, urged an immediate extension to business rates relief. 

'Without this, landlords will see untenable cost hikes, many in the region of over £30,000, which is simply unsurvivable,' said Lord, adviser to Greater Manchester's Labour mayor Andy Burnham. 

Should the rate of venue closures continue, unemployment will rocket and the UK's status as a cultural tourism destination will be 'poached by other global cities', Lord added. 

Business rates are a local levy based on the value of a commercial property, meaning shops pay a premium compared to online giants such as Amazon. 

With relief, hospitality and leisure businesses have 75 per cent shaved off their bill, capped at £110,000 a firm. 

During the pandemic, there was 100 per cent relief between 2020 and 2022, then 50 per cent the following year. It was then extended to 2025. 

But the relief is set to end on March 31, whacking hospitality firms with an extra £928million bill. 

'The dangers of not acting are stark whether you're a pub, coastal hotel or soft play centre for kids and families,' added Kate Nicholls, the head of UK Hospitality, which has 750 members. 

Greene King chief executive Nick Mackenzie said: 'We urge the Government to start to deliver on its promise of full rates reform to create a system that does not unfairly burden hospitality.' 

 Landlords will see untenable cost hikes, many in the region of over £30,000
Sacha Lord,  adviser to Greater Manchester mayor Andy Burnham

Labour has pledged reforms and said the system 'disincentivises investment, creates uncertainty and places an undue burden on our high streets'. 

In its manifesto, it promised to replace business rates to make the system fairer. 

But businesses are worried reforms will be too little too late in the face of closures. High Street employers want a permanent, lower rate. 

Bosses are also concerned by Government plans for workers' rights. Some say introducing day one rights like sick pay, could hit jobs and growth. 

This week 80 brewers and pub bosses, including Greene King and Heineken, urged Reeves not to hike taxes on alcohol. Pubs would have to increase prices, causing a loss of custom, closures and job losses, the British Beer and Pub Association said. 

It called on ministers to freeze beer duty next year and gradually lower duty rates. 

'For thousands of pubs and brewers across the country there is nothing left to give,' it said. 

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