BusinessGovernmentPubs and Bars

One in seven pubs face business rate rises of £5,000 next April

One in seven pubs in England face rises in their business rates bills of nearly £5,000 despite measures announced at the Autumn Budget to cut the rates of smaller high street businesses.

Analysis from commercial real estate advisor Altus Group showed medium sized pubs were the “big losers” in Hammond’s ‘Budget for the high street’.

The chancellor did not extend the £1,000 pub discount for pubs with a rateable value under £100,000. Whilst the chancellor will slash business rates next April by discounting rates bills by a third for those retail properties with a rateable value of less than £51,000, the change in reliefs have left medium sized pubs facing a rate rises.

According to real estate advisor Altus Group, 5,520 medium sized pubs with a rateable value of more than £51,000 but less than £100,000, will not only lose the £1,000 discount but will see their bills rise through an increase of 2.4% in the standard tax rate in accordance with September’s headline rate of inflation.

Further increases, under last year’s revaluation, continue to be phased in and next April under the third year of the system of ‘capping’, medium sized properties face further rises of up to 20%.

Analysis of official government data by Altus Group showed 5,520 medium sized pubs – those with a rateable of more than £51,000 but less than £100,000 – will see their business rates bills rise next April to £192.21m. Overall, this represents a third year cumulative increase of 15.45% with bills up £25.72m compared to the amounts paid in the final year before the revaluation came into effect.

Average medium sized pub’s rates bill

2016/17 – £30,160
2017/18 – £30,579
2018/19 – £32,281
2019/20 – £34,820

Whilst nearly 30% of all pubs in England are exempt from paying business rates all together having a rateable value below £12,000, the new retail relief will see 47% of pubs, those with a rateable value between £12,001 to £50,999, move from a £1,000 discount to a third off their bill next April.    

Rateable Value
Pub Numbers In England Budget 2018 Help
Over £100,000 3,711 Nothing
£51,000 to £99,999 5,520 Nothing – Worse Off
£12,001 to £50,999 18,855 Third Off Rates Bills
Less than £12,000 11,740 Complete Exemption

Source: Altus Group

David Shuttleworth, vice president at Altus Group, said: “Despite this meaningful statement of support for some smaller premises, the qualifying thresholds for the chancellor’s headline giveaway effectively creates a cliff edge for medium sized pubs and has swept from underneath them existing reliefs to cushion the effects of the revaluation.

“It is crucial that medium sized businesses carefully check their assessment which determines liabilities because a successful appeal could mean a third off the rates bill for the next two years via the new relief and the additional benefit of being calculated at a lower tax rate too.”

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