'My pub's business rates could double to £18,000'

Publicans across Yorkshire have warned that government plans to scrap business rates relief would lead to "unsustainable" increases in their costs, with one saying his yearly bill would double from £9,000 to £18,000.

While there is ongoing speculation Chancellor Rachel Reeves may reverse the decision or look to soften its impact, licensees have told the BBC they face an difficult future if the changes go ahead.

In her November Budget, 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.

Paul Kemp is the owner of The Last Drop Inn, a real ale pub in York that he has run for two years.

He says that if relief ends, as currently planned, he would be expected to pay £18,000, at a venue that only has capacity for 60 people.

Kemp said his energy bills were still three times what they were pre-Covid, while he also pays a levy to York BID, which carries out tasks that used to be undertaken by the city council, such as street cleaning, running the Pubwatch scheme and organising events.

"The energy costs here and in the other places I operated before I came here, have probably multiplied by at least three times from where they were before," he said.

"Employers' National Insurances contributions that we are paying out, the threshold has dropped and the rate has increased, so it is like a two-fold increase there.

"In cities like York, we have the BID, so there are extra overheads there.

"You take all these into account, including national living wage, and any margin which we thought we might have been given back, has just been stripped away.

"Putting business rates back in at the full amount has left us with next to no margin at all, so it is a very big impact.

"I am worried in the short term because we have no idea what is going to happen.

"Short term uncertainty causes you medium- and long-term problems."

He said said the rising costs have left him uncertain over whether he can support local causes, such as his sponsorship of the York Knights rugby league team.

"We can't sustainably keep putting up prices, not when household budgets are already stretched. To cover this I can't keep adding money to an already very high price for drinks.

"I think they are already about as high as they can be and it will just push people away from the pubs and into supermarkets picking up very cheap alcohol and drinking it at home.

"It could be a very difficult period for businesses which were already stripped of any cash surpluses to help them get through."

Simon Wade operates a number of venues, including The Blue Bell at Arkendale, near Knaresborough, two pubs in Boroughbridge and a village inn on the outskirts of the town.

If full business rates are implemented, he said he faces paying an extra £110,000 a year.

He said: "That is on top of the £200,000 extra it cost us in National Insurance hikes and minimum wage increases in the previous year.

"It is going to stop any growth. I have been really upset about it. In November for the first few weeks I was getting myself so upset about the whole situation because it is completely unfair.

"When I looked into how they had tried to evaluate this rated increase it wasn't based on anything but a turnover figure, but turnover is nothing, it doesn't mean profitability is there.

"For that to be taxed is so unfair because it not actually anything of any substance."

He added that although major pub chains would be able to absorb the increases, independently-run sites would struggle.

"We haven't got an infinite pot of income, other than what we generate ourselves.

"We have some fabulous people who work for us in the kitchen and they are all at the high end of their profession.

"We have invested in these people to turn it into a great place, to suddenly be penalised for trying to do what we do best."

Speaking on Wednesday Reeves said she was "particularly concerned" about the impact of business rates on pubs and confirmed "there is additional support coming" for pubs before new rates come into effect in April.

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