The Association for Licensed Multiple Retailers (AMLR) has written to Chancellor Philip Hammond asking him to dilute the impact of business rate rises due in April, claiming that many pubs and restaurants could go out of business because of the increases.
The rateable value of businesses is set to change for the first time in seven years in April, with some properties facing a three-fold increase. The rates are calculated by taking the rateable value of a property, based on a potential rent price, and combining it with a multiplier set by the Government.
As property values change over time, rateable values need to be reassessed periodically and the review normally takes place every five years. However, this update is two years later than normal, which makes it much worse in areas where the price of property has been rising.
As the letter points out, the hospitality sector is the only one to have been impacted by an increase in rateable value in every region of the UK. On average, the pub sector will face a 15 per cent increase and restaurants a 23 per cent rise. However, all but three regions are expecting an average increase in rates of 20 per cent. Rises of this magnitude will add a further £300m to £500m in costs to the sector, the AMLR warns.
However, according to a statement issued by the Department for Communities and Local Government (DCLG), most businesses will not face sharp rises in costs and some could even see a decrease in their bills.
The statement goes on to say that the small minority of businesses that do face an increase will benefit from the Government’s £3.6bn transitional relief scheme, which will put a cap on annual increases, meaning that bills will rise gradually over five years rather than all in one go, with greater protection provided for smaller businesses.
