Business rates relief extended until 2025

Many pubs and bars breathed a sigh of relief on 22 November, as the chancellor Jeremy Hunt confirmed that the 75% business rates relief will be extended until 2025.

Hunt also froze the Small Business Multiplier, which will affect some operators, but the Standard Multiplier – where a business’ rateable value is £51,000 or more – will rise with inflation.

In an immediate reaction on social media, UKHospitality CEO Kate Nicholls pointed out that “many small businesses operate from larger standard rated premises, particularly hospitality”.

"The standard multiplier rising by 6.4% will see businesses representing almost two-thirds of the sector’s trade still facing a £150m rates hike," she later added in a statement. "This will only put more pressure on consumer prices and inflation, at a time when businesses are still grappling with high costs of energy, food, drink and wages."

The government has said that its business rates support package is worth £4.3bn over the next five years, including a rollover of 75% Retail, Hospitality and Leisure relief for 230,000 properties and a freeze to the small business multiplier, which its says will protect around 90% of ratepayers for a fourth consecutive year.

Industry commentators have pointed out that this doesn't address the business rates burden in the long-term and that other UK governments also need to act on the issue.

"The chancellor admitted that temporary measures like this couldn’t go on forever, so it is vital that the government urgently reforms the grossly unfair business rates system which penalises pubs and puts their future at risk," says CAMRA chairman Nik Antona.
 
"CAMRA is calling on the Scottish and Welsh governments to commit, now, to offering similar help for pubs with the burden of business rates. We’d also like to see the UK government find a way to help with business rates for the beer and pub sector in Northern Ireland if there continues to be no executive ministers in post to do so." 

Alcohol duty and NLW

After saying he has listened to the “persuasive arguments on alcohol duties”, Hunt went onto confirm that he is freezing alcohol duty to August 2024, which prompted further relief for businesses within the sector.

"We welcome the freeze on alcohol duty, not putting further pressure on top of embedded cost increases that our sector has been facing over the last few years,” says BII CEO Steve Alton.

"Over the past few challenging years, pubs up and down the country have proven their importance as social hubs for their communities, working tremendously hard to overcome every obstacle that has been thrown at them and yet they have continued to be one of the most heavily taxed business sectors in the UK," says Chris Jowsey, CEO of Admiral Taverns. "We welcome the measures announced by the chancellor, including a freeze on beer duty and an extension to the business rates relief which will reduce the unfair tax burden and provide many pubs with an opportunity to trade out of this economic crisis."

However, as previously reported by Pub & Bar, the confirmation that National Living Wage (NLW) will increase to £11.44 in April next year, rising from its current level of £10.42, triggered another hurdle the industry will now have to conquer.

"The statement from the chancellor offers some much-needed support for many of our members, all of whom are facing the most challenging and critical times for their businesses," adds Alton. "However, as small businesses at the heart of their communities, many run by independent operators, the rise in the national living wage to £11.44 per hour will hugely impact the profitability of their venues. While we welcome measures that protect workers, there must be recognition of the impact this mandated increase will have on our small pub businesses."

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