The pub count in England and Wales has dropped by 20% since April 2010, according to rates specialist, CVS.
What’s the latest?
Pubs have closed at a rate of FOUR a day across England and Wales during the past six years as a major property tax has taken its toll.
According to business rates and rents specialist CVS, one in five pubs closed its doors between April 2010 and the end of 2016.
By last December, the pub count had fallen by 20% to just 43,231 – the lowest ever recorded.
Why is this happening?
CVS claimed business rates, a form of tax on commercial property, have been a major contributor to pub closures.
Business rates are based on rents and reviewed every five years. However, a two-year delay has resulted in a seven-year gap between revaluations.
It has meant that businesses have been forking out rates based on rents agreed at the height of the property boom. And it has led to industry-wide calls for a major overhaul.
Above: pub for rent in Newark-on-Trent, Nottinghamshire.
Who does it affect?
It’s clearly bad news for pub businesses that have been forced to shut down premises.
But it’s also unwelcome for landlords that have pub businesses as tenants. When the pub shuts down, they will have to re-let their property – or be left with vacant premises.
However, the flood of former pubs on the market provides opportunity for businesses looking for new premises and eagle-eyed developers seeking new sites.
Sounds interesting. What’s the background?
CVS warned that the problem will get worse this April, when business rates will climb again following a revaluation.
It said that overall business rates bills for the pub sector are set to be hiked by £421m over the next five years. And, with the £3.47 average cost of a pint, pubs will have to pour 121 million extra pints to pay them off.
The review – and in particular, the increase in business rates – has sparked a major outcry across the industry. Rate-paying businesses in London are set to bear the brunt of the hike, in particular retailers. Some retailers and office tenants in the capital will see their rates bills more than double.
But other areas, such as supermarkets, will see their business rates bill slashed under the new system.
The Government said that following the review, three quarters of properties will see no change, or even a drop in their business rates bills. The businesses that face an increase will be able to tap into its £3.6bn transitional relief scheme, it added.
Top 3 takeaways
- Pubs have closed at a rate of four per day across England and Wales during the past six years.
- CVS claimed that business rates have been a major contributor to pub closures.
- Overall business rates bills for the pub sector are set to be hiked by £421m over the next five years following a major review.
You may also be interested in...
- Cut in business rates could unlock £1.75bn of new property
- Chancellor answers calls for business rates reform