Welsh brewery 'would not be paying business rates' if it moved to England

There are calls for fairness in how business rates are applied after rising property valuations left some Welsh firms facing sharp increases in their bills.

The hospitality sector is among the hardest hit as new charges come in from April.

In England, pubs were given a boost this week with extra relief from the Labour government in Westminster, but the Welsh Labour government has yet to say whether it will follow suit.

From the bar to the brewery, pressure is growing for more support to cope with rising costs.

"If my brewery was in Somerset, I would not be paying a penny in business rates," said Philip Thomas.

He runs Bradgy Twt Lol, a craft brewery in Treforest, and is the Wales director for the Society of Independent Brewers.

Thomas said business rates kicked in earlier for small firms in Wales compared with England, and it was "impacting on our ability to compete".

His rivals in Somerset, who are a similar size and don't pay rates, are selling their products in pubs in south Wales.

"I'd like to see parity with England," he said.

"Because it is really, really unfair."

Revaluations of business properties have led to a spike in business rates for some, with the hospitality sector hit by a double-whammy of higher rates and the end of pandemic-era discounts.

Thomas said his business rates climbed from £300 to £3,000 during a previous revaluation exercise, and expects them to rise again during the next revaluation.

Classified as a manufacturing business, his brewery has not benefitted from the reliefs offered to hospitality and which are ending in Wales.

Analysis by UK Hospitality shows the sector's business rates bill in Wales will rise from £83.1m this financial year, to £135.7m in 2028-29.

"Our rateable value has doubled, so we will see a big increase in our rates," said pub owner Cerys Furlong.

The Grange in Grangetown, Cardiff, is a popular and busy pub, but Furlong said her business was "demonstrably and materially worse-off" as a result of a hike in rates.

"Our plea to Welsh government is that they use the Barnett consequential they get as a result of Rachel Reeves' decision, and other money we know will be around at this time with setting the budget, to support local businesses.

"Otherwise, businesses like ours won't exist on high streets in Grangetown and other parts of Wales in future," she said.

Furlong said the focus on business rates may "mask the issue" of needing a more fundamental reform of the tax system.

"How are we going to encourage and support the next generation of entrepreneurs and operators who want to come and run small independent businesses in Wales, into various sectors?" she asked.

"The margins are really, really tight. And if you ask me to be really honest, I wouldn't do it again. So we have got to think about what it is that we want on our high streets right across the country."

A Welsh government spokesperson said it was funalising plans for additional support and "will have more to say soon".

They said: "We recognise the pressures facing pubs and hospitality businesses in Wales.

"The Welsh government already provides substantial rates relief – almost half of pubs benefit from Small Business Rates Relief, and over a quarter pay no rates at all."

Labour

Labour pointed to the Welsh government's statement and the £1bn of support it had offered businesses since the pandemic.

Plaid Cymru

A "cost-of-doing-business crisis" has hit Welsh hospitality, according to Plaid Cymru. The party said it would change the way rates are calculated for small and medium-sized hospitality businesses to "lighten the burden".

Conservatives

The Conservatives warned that the current system was causing some businesses to close, and that there needed to be "fairness" for firms in Wales. The party said it would eliminate business rates for small businesses.

Reform UK

Reform UK said Welsh businesses had been "relentlessly hammered" by Labour governments in Cardiff and Westminster. The party said it would "work to stabilise and strengthen" Welsh high streets, pubs and tourism businesses.

Liberal Democrats

The Lib Dems said support for businesses should be extended beyond pubs, alongside an emergency 5% cut to VAT for the hospitality sector. The party said businesses in Wales should "not be placed at a competitive disadvantage" with those in England.

Green Party

The Green Party said business rates were "throttling" local business while large retailers made "healthy profits". The Greens said they would replace business rates with a new land value tax which would help keep town centres alive.