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Business rates relief welcomed by pubs and drinks retailers

Published:  04 December, 2014

The 2% cap on business rates and commitment to a full "structural review", as revealed by the Chancellor of the Exchequer in his Autumn Statement, has been broadly welcomed across all sides of the drinks industry - both on and off-trade.

George OsborneGeorge Osborne announced a review into business ratesChancellor George Osborne announced business rates relief extensions that will affect a broad swathe of firms in his Autumn Statement

Small business rates relief has also been extended for another year, meaning retailers in properties with rateable values of under £50,000 will get a discount worth £1,000, rising to £1,500 next year.

Ruth Yates, owner of the five-strong Corks Out independent wine merchants in the north west, said business rates were a "huge cost" coming in as much as rent. While she welcomed the immediate relief, she was sceptical over what impact the structural review would have.

"A couple of years ago we employed a company to help review our rates and ended up having them reduced by quite a bit - it was a worthwhile exercise."

"We're about to look at a new warehouse, but the rates are so big that it's not something we're getting a return on. That's hard for us and other independent businesses."

The Association of Convenience Stores chief executive James Lowman said: "We are delighted that the Chancellor has listened to our concerns on business rates by committing to a full review. Local shops will welcome the 2% cap on rates increases and the extension of the higher threshold for small business rate relief, alongside the increased £1,500 rates discount for shops on the high street. We are committed to rates reform that works for local shops and will play a full part in the review in the coming months."

 The British Beer and Pubs Association chief executive Brigid Simmonds, said she was "very pleased" to see small business rates relief extended.

"The increase in the retail relief to £1,500 is more good news, that will benefit 64% of pubs. Overall, over 70% of pubs will receive retail relief.

"For pubs, the current business rates regime makes up 10% of costs. As well as getting bills down, we need to make it easier for pubs to appeal their rates bills and make the system more responsive to changing business conditions. The government is certainly giving increasing attention to this important issue for pubs." 

The Campaign for Real Ale's head of communications Tom Stainer said the extension of small business rates relief and extra £500 reduction for most pubs was "great news for pub goers". "Business rates are a significant burden on pubs and so these announcements will help keep pubs open, boost investment and ensure consumers continue to benefit from great pubs.

"The review of business rates also provides an opportunity to address the disproportionate tax burden on pub beer sales compared to supermarket beer sales," he added.

On behalf of the major retailers, Helen Dickinson, director general of the British Retail Consortium, welcomed the review, saying: "We want a system that brings investment and jobs to the high street without punishing retailers who trade online. The retail industry is the largest rates payer, contributing over a quarter of the total rates tax take.

"Today's short term support package will be of enormous help to those struggling to keep their businesses open on the high street."

John Rogers, Sainsbury's chief financial officer and chair of the BRC industry-wide group looking at the issue of business rates, said: "A clear consensus has emerged across businesses of all sizes and from all sectors - our current outdated system of business rates isn't just a retail problem, but a business problem.

"We will be fully engaging with the review to ensure we get a new system which is fit for purpose in the 21st Century."