(qlmbusinessnews.com Fri. 25th Oct, 2024) London, UK —
Stonegate Group Calls for Business Rates Reform to Save UK Pubs from Closure.
Thousands of pubs across the UK are at risk of closure unless the government extends business rates relief, warns the chief executive of the UK's largest pub company. David McDowall, head of Stonegate Group, which owns well-known pub chains such as Slug & Lettuce, Yates's, and Walkabout, revealed that many pub landlords are making just 12p profit on each pint of beer sold.
Business rates relief, introduced in 2020 to help the hospitality sector cope with the pandemic, is due to expire in April. The relief currently allows pubs, restaurants, and other hospitality venues to claim a 75% reduction in their business rates in England and 40% in Wales, but without an extension, McDowall fears many landlords will see their bills quadruple.
In addition to increasing operational costs, landlords are struggling with a barrage of financial challenges, from recovering after the Covid pandemic to coping with high inflation and soaring energy bills. The rising cost of living has also squeezed customer spending, putting further pressure on pub owners.
“The removal of business rates relief would have a devastating impact on pubs, bars, restaurants, and cafes across the UK,” McDowall said.
A report from the British Beer and Pub Association highlighted that pub landlords make just 12p profit per pint, while the average cost of a pint of lager in the UK reached £4.79 in September, according to the Office for National Statistics. Adding to these challenges, a freeze on alcohol duty is set to end in February 2024, further raising the cost burden on pubs.
Representatives from the hospitality industry, including McDowall, have written to Chancellor Rachel Reeves, urging her to extend the relief in next week’s Budget. The letter warns of a looming “business rates cliff edge” for the sector.
UKHospitality and the British Retail Consortium, which also benefits from the relief, have pointed out that businesses in the hospitality and retail sectors paid nearly £9 billion in business rates in the past year. The removal of this relief would result in an additional £2.5 billion in costs for the industries.
UKHospitality is also calling for a broader reform of business rates, noting that many hospitality businesses are located on high streets where rental values are high, which inflates their business rates. Without reform, the group warns of declining investment in high streets, missed job opportunities, and a potential rise in business failures.
The Treasury responded, stating: “We are supporting businesses, including pubs, by pledging to make the business rates system fairer, capping corporation tax at 25%, and providing a corporate tax roadmap to give businesses certainty moving forward.”
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