**Business Rates Changes Will Cost Me £62,000: A Small Pub Owner’s Perspective**
In a troubling development for small business owners, particularly in the hospitality sector, Phil Thorley, the owner of Thorley Taverns, has expressed deep concern regarding the recent changes in business rates announced in the latest Budget. This shift is projected to increase his annual costs by an alarming £62,000—a staggering figure that poses serious threats to the livelihood of local businesses across the southeast of England.
Phil Thorley operates a small chain of pubs and is facing a situation where the business rates—a tax imposed on commercial properties—are set to rise for 17 out of his 18 locations. This revelation comes despite assurances from Rachel Reeves, the opposition’s shadow chancellor of the exchequer, who had pledged lower taxes specifically targeting sectors like retail, leisure, and hospitality. Reeves had previously informed the public of her intention to implement the lowest tax rates since 1991 for pubs and restaurants, specifically through increasing taxes on more lucrative properties owned by corporations such as Amazon.
The government presented its rationale by claiming that most “typical independent pubs” would experience a reduction in costs, with estimates suggesting savings of around £4,800 per year. However, the data shows a contrasting reality for many establishments. The rateable value—a figure used as the basis for calculating a business’s rates bill—primarily hinges on the potential rental costs associated with a property. As it stands, many businesses are witnessing increases in their rateable values, coupled with the unwelcome news of the phase-out of a 40% discount initially introduced during the Covid pandemic starting from April.
Analysis from tax advisory experts at Ryan indicates a bleak future for small operators in the industry. Small shops may face rate increases averaging 42%, restaurants an increase of 45%, while pubs could see a staggering jump of 66%. Such financial pressures might not only hurt the businesses but could also lead to further devastating impacts on local employment and investment.
During an appearance on BBC Radio 4’s Today programme, Mr. Thorley emphasized that most of his sites are experiencing rising rateable values. He articulated the harsh reality for family-run establishments, describing how the forthcoming increase of approximately 27% in their payable rates translates into a crippling additional cost of £62,000. This figure comes at a time when the pub industry is already struggling under significant pressure due to rising operational costs initiated by prior changes in government policy, including increases in national insurance contributions and the introduction of a higher minimum wage.
Thorley warned that without intervention, the ongoing cost increases will lead to a decline in employment opportunities, reduced investments, and fewer training programs for young individuals seeking jobs within the sector. He emphasized that the current trajectory suggests this Budget could signal “the death knell to the British pub.”
Meanwhile, additional voices from the industry relay similar sentiments. Elaine Wrigley, who owns the Atlas Bar in Manchester, criticized the Budget as a mere façade, arguing that even with the newly proposed lower multipliers for certain businesses, her bar’s rateable value has surged from £69,000 to £97,000. This shift translates to a significant increase in her business rates, causing her to describe the situation as exorbitant.
Sacha Lord, the chairman of the Night Time Industries Association (NTIA), referred to the altered business rates as a “stealth tax” impacting High Street establishments, and forecasted a wave of closures surpassing those experienced during the pandemic once these changes take effect in April.
In response, the Conservative party has termed the changes a “bombshell,” suggesting that numerous pubs, restaurants, and shops face enormous rate hikes as a consequence. Shadow business secretary Andrew Griffith expressed that the government’s plans would likely result in more closures and a reduction in job opportunities, urging for urgent amendments to the current course of action. The Liberal Democrats have joined the call for reform, suggesting the chancellor explore tax adjustments like a VAT reduction to alleviate pressure on the beleaguered hospitality sector.
In essence, the current dialogue surrounding business rates underscores a critical juncture for many in the hospitality industry, which is grappling with increased operational costs amidst an uncertain economic landscape. As many operators brace themselves for further challenges ahead, calls for meaningful legislative support become more urgent than ever.
