End of the local? One pub in five faces closure as rates bills soar

Soaring business rates are resulting in the closure of many pubs.

Figures from rates and rents specialist CVS show that a fifth of pubs – or 11,443 – have closed between April 2010 and the end of last year, which is the equivalent of four pubs every day.

And business rates for pubs across Yorkshire are set to rise by £13m over the next five years prompting mounting concerns that there will be a fresh wave of closures.

At an average price of £3.15 per pint, pubs across the region will have to serve their punters four million extra pints just to fund increases in property taxes, CVS said.

Mark Rigby, chief executive of CVS, said: “Rating for pubs is notoriously complex.

“Unlike other rates assessments which are based on rents, valuations for pubs are based on an assessment of ‘fair maintainable trade’, which is calculated using information on turnover, services offered, the local area and other factors.”

He said: “This is a sector already struggling, and only recently we heard even more bad news for beer-drinkers as Heineken and Carlsberg are forced to pass on increased costs to consumers.”

He added: “It’s important for pub landlords across Yorkshire to know that despite Government reforms which disadvantage ratepayers, it is possible to challenge these new assessments with professional support.”

There is now the lowest ever number of pubs in England and Wales, at 43,231, down from 54,674 in April 2010.

And there are concerns over the health of many more pubs, as well as a raft of firms in other sectors, as rates are set to rise again in six weeks.

The research revealed by CVS suggests that 17,160 pubs will have to pay more in business rates from April, with rises for pubs in 881 towns across England and Wales.

It is estimated that overall business rate bills will be hiked by £421m for pubs in England and Wales over the next five years.

The Government’s recent revaluation means that all properties with a rateable worth of £12,000 or more will have to pay business rates. There are also significant differences in rate hikes, with central London pubs facing a 43 per cent hike and those in Manchester looking at a 12 per cent increase.

Chris Howard, owner of Aire Bar in Leeds, said his rates bill is set to soar by 90 per cent in April – a hike of £20,000 – as a result of an “unfair” valuation system.

Mr Howard, who will appeal against the rise in April, said: “I think we will continue to see closures as a result of the increase in business rates. A lot of people will have some tough decisions to make on whether to continue, myself included.”

A Government spokesman said: “Following the revaluation, three quarters of properties will see no change or even a fall in their bills, and the small minority of businesses that face an increase will benefit from our £3.6bn transitional relief scheme.”

But Brigid Simmonds, chief executive of the Beer and Pub Association, said: “It is clearly unfair, and for some pubs. The revaluation has led to some huge increases.

“We need a scheme of relief that is specific to the pub sector which is without doubt, a force for good in local communities.”

CVS said pubs in Yorkshire were definitely set for a “massive business rates shock” come April, with leading pub operators already claiming they will need to crank up prices by as much as 30p per pint.

Tim Martin, Chairman of JD Wetherspoon, has previously stated that taxes, and in particular business rates, are “killing” pubs.