Prime Minister Andy Burnham announced today (23 July) that the reduction will apply from April, with the Government estimating it could save a typical pub an around £1,100 in tax next year?
The cut will cost around £100m, will No 10 says will be funded by a review of tax reliefs given to businesses ‘such as vape shops’. The rates relief will benefit nearly 32,000 venues, according to the Government, and also won’t apply to the ‘very largest’ live music venues, it says.
Industry bodies the British Beer and Pub Association (BBPA) and the Night Time Industries Association (NTIA) welcomed the Government’s move. “The local has and always will be more than just a place to get a pint; it creates jobs, it’s our nation’s living room, it’s the anchor of the high street, so this sorely needed discount will be celebrated by pubs up and down the country,” says Emma McClarkin, BBPA.
“We now look forward to working with government to deliver permanent business rates reform so we can keep the pub in its rightful place; at the heart of our communities.”
Michael Kill, CEO of the NTIA, says: “Having worked closely with the new Prime Minister’s team over recent weeks, it is encouraging to see a positive outcome from genuine engagement with the sector,” said “The inclusion of clubs alongside pubs and live-music venues is particularly important and demonstrates a broader recognition of the vital economic, cultural and social contribution made by the night-time economy.”
Kill says he is awaiting the full details and eligibility criteria, which are expected to be announced at the autumn budget. He says the NTIA will also seek clarity on the proposed exclusion of the largest live-music venues and continue to press for the final scheme to provide the broadest possible support.
“The government is undoubtedly making the right noises. We look forward to continuing this constructive dialogue and ensuring these commitments translate into tangible and inclusive support for businesses throughout the night-time economy.”
Wider hospitality sector needs support
UKHospitality also welcomed the move but called on the Government to extend its support to the wider hospitality sector.
“This is good news and a welcome first step from a Government that understand the value of hospitality to jobs, growth and local communities.
“The Prime Minister is right to say this should be just the start. Restaurants are struggling just as much as pubs, while hotels are due to see their business rates bills increase by an average of 110%, the highest in the sector,” says Allen Simpson, UKHospitality chief executive.
“After years of rising costs and tax increases that have hit investment and employment, the industry now needs a meaningful, sector-wide solution. While today’s announcement will provide welcome support for pubs, clubs and live music venues, they only account for around a fifth of hospitality jobs. The rest of the sector now needs to see the same ambition.
“We look forward to working with the Government at the forthcoming Budget to deliver the wider businesses rates reform it has promised and create a fairer system that enables businesses to invest, create jobs and grow.”
‘A shot of relief’
Saxon Moseley, partner and head of leisure and hospitality at audit, tax and consulting firm RSM UK, describes the move as “a shot of relief for pubs, clubs and live venues” but says the Government needed to do more to save the high street.
“Pubs are at the heart of our communities, and this social value has been acknowledged with today’s planned measures to attempt to stem the flow of financial distress,” he says
“However, a thriving high street is more than pubs, clubs and live venues and excluding restaurants and hotels creates confusion around eligibility and further complexity and nuance in the tax system.
“There is no doubt that this will look to offset some of the significant rate burden in the short-term, but what is needed is widespread rate reforms that instils fairness across the hospitality industry to make it cheaper for businesses to operate – making the high street a more attractive place to invest.”
