Phil Thorley, owner of Thorley Taverns, a small pub chain in Southeast England, has reported an expected annual increase in costs of £62,000 due to recent changes affecting business rates. Thorley stated that 17 of his 18 establishments will see a rise in business rates, despite promises from Rachel Reeves of lower taxes for retail, leisure, and hospitality sectors. Reeves had previously committed to implementing the lowest taxes since 1991 for small businesses while adjusting taxes for higher-value properties.
The government claims that the changes will save the average independent pub around £4,800 annually. The rateable value, which determines business rates, reflects the estimated rent of a property, and will be calculated using a reduced percentage for 750,000 high street businesses according to government methodology. However, many businesses have also experienced increases in their rateable values, alongside the phasing out of a Covid-era 40% discount starting in April.
Thorley indicated that the actual payable rates for his company would rise by approximately 27%. He expressed concerns that the industry is already strained from previous fiscal policies, including an increase in employer national insurance and minimum wage. Thorley warned this could negatively impact employment and training opportunities.
While the government has announced a £4.3 billion support package for pubs and restaurants, criticisms have emerged. Elaine Wrigley, owner of Atlas Bar in Manchester, reported a significant increase in her bar’s rateable value and anticipates a 15% rise in her business rates, despite government claims. Sacha Lord of the Night Time Industries Association described the changes as a “stealth tax” that could lead to more business closures.
Political responses have varied, with Shadow Business Secretary Andrew Griffith criticizing the government for not providing a larger discount and warning that many businesses could face closures due to rising costs. The Liberal Democrats have also called for immediate action to support the hospitality sector.
Source: https://www.bbc.com/news/articles/cvgj85x380do?at_medium=RSS&at_campaign=rss