Government to water down business rate rise for pubs

The government is poised to announce a climbdown on forthcoming increases to the business rates bill faced by pubs.

In the coming days the government is expected to say it will make changes to how pubs’ business rates are calculated, resulting in smaller rises to bills.

Treasury officials say they have recognised the financial difficulties facing many pubs after sharp rises in the rateable value of their premises.

The move follows pressure from landlords and industry groups that included more than 1,000 pubs banning Labour MPs from their premises.

In her November Budget, Chancellor Rachel Reeves scaled back business rate discounts that have been in force since the pandemic from 75% to 40% – and announced that there would be no discount at all from April.

That, combined with the adjustments to rateable values of pub premises, left pubs with the prospect of much higher rates bills.

The government had already offered some relief by reducing the “multiplier” used to calculate business rates. It is now expected to reduce that further to ease the impact of the higher bills.

Alternatively they could boost the £4.3bn “transitional relief” fund brought in to ease the impact of withdrawing support following the pandemic.

Unpicking the recent Budget would be seen by many as another U-turn following climbdowns on winter fuel payments, disability benefits and inheritance tax on farms and family businesses.

The discount on rates during the pandemic only applied to pubs in England.

Scottish businesses are waiting for the Budget there next week to hear how the Edinburgh government will approach the issue.

Pubs there will hope the Scottish government follows the UK government in offering some relief.