Business rates hike a 'cash grab', landlord says

Many pubs will be "squeezed into non-existence" if business rates rocketed in hospitality, publicans in York warn.

Following the Valuation Office Agency's latest revaluation, coming into effect on 1 April, rateable values are set to go up by an average of 41% for hospitality firms in the city, according to York BID.

Labour MP Rachael Maskell raised the issue in Parliament on Wednesday and urged the prime minister to review business rates proposals to avoid "doors closing" in York.

Sir Keir Starmer responded: "During Covid, the rates went down and that was coming to an end, and that's why we put in place interim relief as we move to the new rates.

"We are continuing to work with and talk to the sector on that support and what further support and action we can take."

Following national pressure from landlords and industry groups, the government could be set to announce a climbdown on forthcoming increases to the business rates bill.

Paul Gardner, owner of The Terrace Sports Bar & Kitchen on New Street, said a business rates rise was "forcing people under".

"We can't afford the increases that are coming at us already, and now our business rates have gone from £50,000 to £102,000," he said.

Gardner, who has been a publican for 28 years, said he was no longer able to replace staff members who leave due to the expense of employing new workers.

Business owners in the city report further cost pressures, including an increase in the National Living Wage, employers' national insurance contributions and the potential introduction of a tourism tax.

"It's not sustainable, you can't go on forever with that happening," Gardner said.

John Pybus, owner of The Blue Bell in Fossgate, said his business needed to sell an extra £10,000 to £20,000 of beer each month to make up for rising business rates.

"I think a lot of businesses are going to be squeezed into non-existence in the next financial year," he said.

"When you lose a pub, you actually lose a part of the community – you lose a part of our social fabric, our national shared heritage and culture," he explained.

"And communities that don't get together in person are very fractured."

A firm's rateable value is based on how much it would cost to rent a firm's property for a year, and is used to calculate a business's rates bill.

Analysis by York BID suggested that the hospitality sector, which accounts for around 34% of businesses in York, was hit hardest, with rateable values rising by a combined £10m across 331 businesses.

Andrew Lowson, York BID executive director, said: "A 41% increase in rateable value is not a marginal adjustment - it represents a step change in costs for a sector already under intense pressure.

"Without meaningful intervention or transitional support, these changes risk undermining business viability, jobs, and the vibrancy of the city centre."

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