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Hospitality leaders urge chancellor to mitigate steep rises to business rates

Published:  13 February, 2017

A behind-schedule update to bring business rates in line with property prices could hit pubs and restaurants hard - particularly in town centres and the south east where property prices have sky-rocketed.

The Association of Licensed Multiple Retailers (ALMR) has written to the chancellor, asking him to dilute the effects of a planned update to business rates in April.

Some of the biggest names on the high street including All Bar One and Slug & Lettuce have signed the letter, which warns that "on average, the pub sector will see a 15% increase and restaurants a 23% increase across the country. 

"This will add a further £300m to £500m in additional cost in the hospitality sector."

The ALMR said the impact of the extra costs could threaten the positive contribution the sector is making to overall economic growth in the UK and is urging Phillip Hammond to consider reviewing the transitional relief provisions to help shock absorb the increase.

They are also recommending the introduction of a sector-specific fund to help pubs, bars and restaurants.

Business rates have always been consistent with property prices and are calculated by multiplying the rateable value of a property by a multiplier set by the government.

But while this multiplier is usually updated every five years, the government has fallen two years behind schedule, meaning that any increase will have a larger than usual impact on businesses - especially in areas worst affected by the property bubble.

This morning, WSTA  chief executive Miles Beale drew attention to the accumulative effect of increased business rates with higher-than the European average levels of excise duty on the UK wine and spirits industry.

"Pub and restaurant owners are already vulnerable thanks to the prospect of increasing inflation, the threat of excise duty increases and, now, the added hurdle of up to a 42% increase in their business rates this year," he said. 

"The latest research shows that British pubs are closing at a depressing rate of 23 a week. We are urging the chancellor to take action now to review the impact of sudden and dramatic business rate changes - and to provide specific support for the hospitality sector - for example by making a 2% cut to wine and spirit duty.