More than 5,000 will see a rise in business rates after their property tax valuations doubled. The head of the Valuation Office Agency (VOA) told MPs that 13% of pubs have been hit with a 100% increase in their so-called rateable value, which is based on how much rent the property would attract. That is a total of 5,100 pubs. Rateable value is used to calculate business rates bill, with the average pub facing to pay £1,400 a year more initially and £12,900 over three years.
Pubs with the largest rises in property tax valuations face even bigger increases. VOA chief executive Jonathan Russell said that ministers had been aware of this increase before the Budget, undermining claims by Business Secretary Peter Kyle that the Treasury “didn't have access” to important information.
Shadow Chancellor Sir Mel Stride said: “Labour's business rates chaos wasn't an accident – it was a choice. Ministers were warned about the damage to pubs and high streets and pressed ahead anyway. Now businesses are left in limbo while Labor dithers.
“This government does not understand business and would rather reward welfare than work.
“Temporary fixes won't save our high streets. We need permanent cuts to business rates so pubs and local businesses can survive, grow and thrive.”
However, Rachel Reeves Reeves is refusing to support the wider hospitality industry such as cafes, restaurants and hotels as well as theatres, music venues and shops.
A report by UK Hospitality warned six such venues will close every day this year without support, a total of more than 2,000. The trade body is calling for ministers to quadruple the level of discount applied to business rates for hospitality firms.
UK Hospitality chief Kate Nicholls said: “This is yet another example of just how hard hospitality businesses are hit by significant increases to rateable values, which have driven staggering business rates rises.
“The Treasury was warned, by UK Hospitality, to expect significant increases to rateable values, due to the previous revaluation being based on valuations during Covid. We laid out, in no uncertain terms, that the maximum 20p discount to the multiplier was absolutely necessary to offset these rises in rateable values.
“Sadly, our warning was not heeded, and now the level of business rates increase over three years will be simply unsustainable for many businesses to absorb.
“This is a hospitality-wide problem that needs a hospitality-wide solution. The government needs to deliver the full 20p reduction to the hospitality multiplier.”