Business rates cut by new Prime Minister
Pubs, clubs and live music venues across England are set to receive a 20% cut to business rates bills from next April. The move has welcomed by the beer and hospitality sector, offer it “breathing space” and assist in reviving community-focused businesses in high streets across England. db reports.
The action was taken by new Prime Minister Andy Burnham who began his tenure this week and has only been in the role for three days, but has long-stated his intentions to build an economy that works for everyone.
Saving the hospitality sector
The decision, which will save the typical pub an estimated £1,100 next year, is part of a wider action plan from Burnham to save the hospitality sector and support local hubs. The action also forms part of a series of measures to cut costs for working people and communities, including electricity bill VAT relief and £2 bus fare cap.
In its statements regarding the cuts, the Government highlighted that, for too long, the pubs, social clubs, and live music venues that form the backbone of local high streets have been replaced by boarded up windows and for sale signs. The announcement forms part of a wider plan from the PM to drive good growth in every postcode by reducing the burden on local businesses, boosting investment on high streets and helping communities to thrive.
Benefitting ‘nearly 32,000 pubs, clubs and live music venues’
In a statement, the Government indicated that the new business rate cuts will “benefit nearly 32,000 pubs, clubs and live music venues, saving the typical pub an estimated £1,100 in the next financial year, providing much-needed certainty for businesses looking to invest, grow and create jobs”.
The changes will be fully funded, including through reviewing reliefs for businesses that do not make a positive contribution to local communities, such as vape shops. Also, the Government has revealed that it will also crack down on businesses that sell through online marketplaces but do not comply with their tax obligations, putting them at an unfair advantage over businesses that play by the rules.
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According to the statements from Westminster, the Government is consulting on measures to make online marketplaces more responsible for preventing non-compliant sellers from avoiding their tax obligations and further detail will be set out in due course. Additionally, revenue raised from these reforms will be reinvested in improvements to the business rates system.
Reviving ‘the beating heart of communities’
Speaking about the changes, Prime Minister Andy Burnham said: “For too long, governments have stood by while cherished venues have disappeared from our local high streets. So today I am changing that. This government will back the businesses that people want to see in their communities. I said I would protect pubs and local high streets – the beating heart of our communities – and that’s what we will do. What we’re announcing today is just the start as we work to bring back hope across the country.”
Chancellor of the Exchequer John Healey said: “Pubs, clubs and live music venues are at the heart of communities across the UK. They help make a place what we love. They bring people together, support local jobs and help keep high streets and town centres busy — which is why we will back them all the way. We are determined to bring hope back, give businesses the support they need and generate growth in every postcode. This is just one step of the Government’s plans to back our communities and high streets and we will return to our commitment to reform the wider business rates system, including Small Business Rates Relief, at the Budget.”
‘Breathing space’
Responding to the PM’s actions, Campaign for Real Ale (CAMRA) chairman Ash Corbett-Collins, said: “This is a brilliant start to the new Prime Minister’s tenure, living up to the statements that he’s made before about pubs, pints and people. Our business rates system is grossly unfair to pubs and social clubs, bricks and mortar businesses that are also vital social institutions for their communities and desperately needs reform. As always we need to see the details at the Budget, but another year of rate relief will provide vital breathing space to publicans in England, while the work to review the rating system for hospitality businesses presumably continues.”
Independent brewers across England have also applauded Burnham in keeping his pub promise. Society of Independent Brewers and Associates (SIBA) chief executive Andy Slee added: “The new Prime Minister promised he would deliver much needed support for our cherished community pubs on business rates and he has acted quickly to do so. A 20% cut to business rates will make a real difference to the bottom lines. Our pubs and breweries contribute around 40% of turnover as taxation compared to online global giants that only pay a fraction of that to the Treasury. Rebalancing this tax burden on business rates away from businesses that contribute to the community and support jobs in our towns and villages will make a real difference to every postcode. We hope this is the first step in wider support and that the Prime Minister also looks to reduce tax on draught beer sold in pubs and ensuring that small breweries can sell their beers to pubs across the UK.”
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