Pubs have had it rough over the past few years. The industry was perhaps hit the hardest during COVID-19, with few of our taprooms having any means to diversify. This led to most of our pub landlords relying solely on government handouts for survival, waiting anxiously for a time when they could once again open their doors to the public.
But the initial easing of lockdown didn’t provide the respite many pubs were hoping for, as the government's swift U-turns and awkward restrictions made for multiple false-starts, and the experience of going for a drink less accessible to the general public, resulting in a lower turnover.
If it wasn’t for the Hospitality, Leisure and Retail relief scheme, pubs might not have made it through the pandemic. But while this gave our pubs a much-needed break in paying rates, the British Beer and Pubs Association (BBPA) say that pubs overpay on their business rates by a staggering £570 Million per year.
According to the BBPA, the business rates bill for the hospitality industry makes up 2.5% of total business rates paid. However, hospitality represents just 0.5% of total rateable turnover, putting a disproportionate burden on our pubs compared to other industries' liability for business rates.
The hospitality sector generates £23 billion of economic value and provides nearly 1 million jobs. And the vast majority are run as small and medium-sized enterprises or “SMEs” for short. So as one of the highest-taxed industries per pound of turnover, the BBPA recommends something that you will have heard mentioned in our own blogs numerous times; an online sales tax to reduce the burden of rates on physical properties.
It’s clear that for pubs especially, business rates need reform. but this new data from the BBPA puts a £570 million annual value on what the system actually costs our pubs. We know there’s no big shakeup planned for the business rates system any time soon, so maybe it’s up to pubs and business rates agents to work together in the meantime, to ensure rates are as low as possible.
We’ve already worked with a number of pubs and brew houses across the UK to reduce their business rates liability, and our cases get stronger with every new client. So if you’re a landlord concerned about your rates, please get in touch to see how we can help.