Pub Closures Easing but 2 A Day ‘Vanish’ Since Last April’s Tax Shake Up
In the first revaluation of business properties for 7 years, which came into effect on 1st April last year and which determines property tax bills for the next 5 years, pubs saw their Rateable Values increase by 14.24% to £1.627billion.
But, since the revaluation, between 1st April to date, in just 10 months, 616 pubs have now “disappeared” from the Rating List completely having called time. Their removal, for tax purposes, means that they have been either been demolished or converted into other types of use.
The news comes as pub chain, JD Wetherspoon, warned that whilst profits were ahead of expectations after better-than-expected sales, “significant costs” would weigh on its performance over the remainder of the year with Chairman Tim Martin citing the impact of business rates as a factor.
At the Spring Budget last March, to try and ease the rates burden, Phillip Hammond handed 90% of pubs a £1,000 discount off their business rates bills for those with a rateable value of less than £100,000. That was extended at the Autumn Budget in November for a further year to cover 2018/19 bills.
The rate at which pubs are being converted into other forms of use is however easing according to Altus Group. During the life of the previous business rates regime, 11,608 pubs were converted into other types of use with the number of pubs falling from 54,674 to 43,066 between April 2010 and April 2017 equating to around 4 a day. Today, the number of pubs in England and Wales, liable for business rates, stands at just 42,450.
Alex Probyn, UK president of business rates at Altus Group, said: “The increase in the thresholds at which pubs pay business rates coupled with the additional £25million of rates relief has, undoubtedly, stemmed the decline,” with Probyn adding that “the ‘fair measurable trade’ principle is an important part of calculating the rateable value of a pub, but it isn’t openly disclosed. The only tangible way to resolve concerns around a pubs rates valuation and achieve the best outcome is through formal appeal.”