Business rates
It’s sad that, having grasped the nettle of business rates reform, the government has ended up tinkering with the new system almost immediately. The new system did not produce the reductions that were expected and so there will now be an additional 15% discount applied to business rates bills for pubs from April 2026. This is intended to have the effect of freezing the amounts payable for 2027/28 and 2028/29 and is being done to recognise the ‘social and cultural value of pubs’, presumably in the light of the current rate of closures.
Attention has now shifted to the way that rateable values for pubs are calculated. The method currently in use is the Fair Maintainable Trade (FMT) method. This is an assessment of the level of trade that a pub should be able to achieve, assuming that it is a reasonably efficient business, based on its level and pattern of trade, its design and location and the services that it offers (such as food, sports screenings and accommodation). Only pubs are assessed using this method. As it is in effect the turnover rather than the net profit that is assessed, FMT is not flexible enough to reflect the ever-increasing overheads that pubs are currently experiencing. The government will be reviewing this arrangement with a view to any changes coming into effect for the next scheduled revaluation in 2029. Many in the trade are hoping for a complete change of method.
Rateable values are assessed by the Valuations Office Agency (VOA), which the government has now decided, will be subsumed later this year into HM Revenue and Customs. It is possible that this may have some effect on the process.
Staying up for the Cup
The government has now confirmed that pubs in England and Wales will be able to open after midnight for any games in this year’s FIFA World Cup that feature any team from the home nations. There is also going to be a consultation exercise on allowing pubs to stay open late for other types of cultural event. Additionally, the number of temporary event notices for which pubs can apply may also be increased.
Low alcohol but not low cost
The consumer data firm Circana, as reported in the Sunday Times, has found that, despite them not attracting beer duty, the cost of no and low alcohol beers in shops and supermarkets rose by 8.3% during the year ended 31 January. No/low cider prices rose by 15.5%. The British Beer & Pub Association (BBPA) explained, “Alcohol-free beer is significantly more complex and costly to produce. Brewers need to invest millions in dealcoholisation equipment, often resulting in higher ongoing energy costs. Raw material prices are at record highs and producing great-tasting no-and-low beer frequently requires additional ingredients.” The value of the trade in shops and supermarkets has nearly doubled over the last five years, from £112 million in 2022 to £213 million currently.