7,000 pubs denied tax relief, with chains left most exposed

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Nearly 7,000 pubs in England – more than a quarter of all of those eligible – have all lost out on government assistance because of Brussels’ State Aid rules, with those belonging to a chain most likely to be affected, it has been claimed.   

Chancellor Philip Hammond vowed to help and try save the high street pub at his Spring Budget last year with £25m to fund a £1,000 pub discount for 90% of pubs. The pledge was also extended for a further year.

But according to real estate advisor, Altus Group, whilst 24,375 pubs not exempt from paying rates had a Rateable Value less than £100,000 and were eligible to Hammond’s £1,000 discount, during the first year of the discount during 2017/18, just 17,707 pubs received the discount.

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EU rules restrict state aid to €200,000 (£176,000) per business over three years meaning that the pubs that are part of a chain were the most likely to have missed out.

The news comes as 33 pubs a week between 1 April and 30 September 2018 have either been demolished or converted into other types of use such as homes and offices according to an analysis of official government data by Altus Group, up from 25 a week during the entire previous year.

Altus Group say that, if the current headline rate of inflation remains unchanged at 2.7% for September, with the loss of the discount, pubs face a third year cumulative increase in bills of £89.93m since the revaluation up to £745.18m overall unless the discount is protected in this month’s Budget.

The loss of the £1,000 discount, coupled with the phasing in of increases and inflation, creating a ‘triple whammy’ of increases for pubs, would see the average business rates bill of a pub rise 9.4% from £16,651 this year for 2018/19 to £18,220 from next April for 2019/20 according to Altus Group.

David Shuttleworth, VP at Altus Group, has urged the Chancellor to help protect pubs further: “This month’s Budget is a great opportunity for the Chancellor to back business given the uncertain times that we face through Brexit, particularly, for those in the hospitality

“An unprecedented stimulus of freezing inflationary rate rises in April 2019 would benefit not only all pubs, but all businesses across the hospitality sector, whilst extending the pub discount by 50% to £1,500 would be a minimal cost funded largely by the underspend on the discount during the previous 2 years.”

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Andrew Seymour

The author Andrew Seymour

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