Pubs in England are paying almost six times more in business rates than can be justified by their turnover, according to research by the British Beer & Pub Association.
The figures show pubs with an annual tax bill £500m over their fair share.
These new findings have been revealed in the BBPA’s submission to the Government on business rates. The BBPA, which makes a wide range of recommendations, says the system is now “in urgent need of reform”.
The finding show that pubs and bars pay 2.8% of the total UK business rates bill but account for just 0.5% of business turnover. The BBPA wants a major overhaul, so that the system more closely reflects modern Britain’s economy, including as online sales, instead of the current purely property-based system.
The BBPA claims pubs are also hugely disadvantaged in other ways by the current system. They have seen a big reduction in sales in recent years, and whilst rateable values are linked to turnover, the rates system does not keep up with these changes. Allowing pubs more flexibility to appeal their rateable value based on a material reduction in turnover would make the system respond to the needs of business by recognising an adverse change in their circumstances, the organisation says.
BBPA chief executive Brigid Simmonds said: “Many high street businesses are being damaged by unfairness in our rating system, but it is a particular problem for pubs. We need a system that is both fairer overall, and much more responsive to the needs of businesses like pubs.
“Pubs and the wider hospitality industry are hugely important to local communities, to the high street and to our tourism industry, and are a key engine of job creation. This review is a huge opportunity to address some of these crucial issues, through wide-ranging reforms. The Government deserves credit for raising these huge issues, and we mustn’t lose this opportunity.”
