More than 5,000 pubs face brutal enterprise charges hike after property tax values DOUBLE

More than 5,000 pubs face a ‘staggering’ rise in business rates after their property tax valuations doubled, it emerged yesterday.

The head of the Valuation Office Agency (VOA) told MPs that 13 per cent of pubs – a total of 5,100 – have been hit with a 100 per cent rise in their so-called ‘rateable value’.

This is used to calculate their business rates bill – leaving publicans facing huge tax increases in yet another bruising assault on the sector under Labour.

The average pub faces paying £1,400 a year more initially and £12,900 over three years, though those with the largest rises in property tax valuations face even bigger increases.

VOA chief executive Jonathan Russell suggested minsters were aware before the Budget that rateable values were set to rise – undermining claims by Business Secretary Peter Kyle that the Treasury ‘didn’t have access’ to crucial information.

Analysis by the British Beer and Pub Association suggests pubs will need to sell an extra 1.3billion pints of beer a year to offset surging taxes under Labour.

Last orders: Pubs face soaring taxes under Keir Starmer

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 Labour dither.

‘This Government doesn’t 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.’

The Treasury last week signalled a major U-turn following warnings that hundreds of pubs could be forced to close after a big hike in rates.

But Rachel Reeves Reeves is resisting pressure to offer support to 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.

It is calling for ministers to quadruple the level of discount applied to business rates for hospitality firms.

Greater Manchester mayor Andy Burnham, a former Cabinet minister and possible challenger to Sir Keir Starmer, called for a ‘rebalancing of taxation so that we help the High Street’ – not just pubs.

‘I would support relief for the high street,’ he said. ‘I think what is needed is a root and branch review of land and property taxation overall and business taxation linked to that.’

Appearing before MPs on the Treasury Select Committee yesterday, Mr Russell said pubs saw an average increase of 32 per cent in their rateable value, which is based on how much rent the property would attract.

But he also revealed that 5,100 pubs ‘would have seen their valuation doubled’.

Asked by Tory MP Dame Harriet Baldwin if he had flagged this ‘huge increase by historic standards’ to the Treasury before the Budget, he said: ‘We make it very clear there are changes in rateable value because of the work we’re doing.’

John-Paul Marks, chief executive of HM Revenue and Customs, noted that the Chancellor announced a £4.3billion relief package for pubs having received ‘data drops’ on valuations from the VOA ahead of the Budget.

In the Budget, the Chancellor announced a reduction in the so-called ‘multiplier’ used to calculate business rates.

But she also confirmed that Covid-era discounts for retail, leisure and hospitality businesses would be phased out.

Alongside soaring valuations – in part due to a rebound in trading following the pandemic – it means business rates bills are rising rather than falling.

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.’

Emma McClarkin, chief executive of the British Beer and Pub Association, said: ‘This illustrates just how sharp a rise some pubs will feel from April.

‘Many of these closures are the inevitable result of a heavy tax and rates burden, which is why it’s never been more vital for a pub-specific business rates relief.

‘It’s key for jobs and communities that we do not lose our cherished locals and we await the detail in the Government’s announcement.’