Star Pubs & Bars is lodging business rates appeals for 136 of the pubs in its 1300 strong estate in the first quarter of 2014 on the basis of an external material change of circumstances. It’s an example that many other licensees should be considering.
Appeals will be made by chartered surveyors Gerald Eve who together with Star Pubs & Bars undertake a biannual review of the company’s pubs to see if lessees could be eligible for business rates cuts.
Star Pubs & Bars has made 355 such appeals since 2010 with a success rate of over 40%, generating average savings of nearly £2,500 a year for lessees. The company has a further 196 appeals outstanding, a quarter of which have gone past their target date for review by valuation officers.
“While we welcome the changes announced by the Chancellor to business rates last year including the commitment to eliminate the backlog in outstanding reviews, we believe a root and branch reform of the system is needed,” says Chris Jowsey, Star Pubs & Bars trading director.
Rateable values based on pre-downturn performance
“Current rateable values are based on how pubs were performing in the boom time of April 2008 before the downturn. However, only those pubs which have seen an external material change of circumstances can appeal their rates, everyone else has to wait until 2017. This puts an unfair tax burden on pub operators who should be able to appeal when their turnover is materially reduced for any reason.”
Many other licensees likely to be paying too much
Star Pubs & Bars believes that based on its experience many other licensees may well be paying business rates that are too high. Adds Jowsey, “With business rates accounting for an increasing percentage of operating costs and affecting the bills faced by licensees in other areas such as the Late Night Levy and Sky charges, it is vital that licensees check if they have grounds for an appeal.”
The Horseshoe, Sywell, Northampton
Eve Jackson, licensee of the Horseshoe in Sywell for 15 years, was delighted to receive a 27% reduction in the rateable value of her pub saving her £5,500 a year thanks to Star Pubs & Bars’ business rates appeal scheme.
Eve had been receiving transitional relief on her business rates to soften the impact of a big hike in her bills in 2010. When the relief came to an end earlier last year, she found her business rates had soared by around £10,000 a year. “I was shocked, they were astronomical and did not reflect our trade,” says Eve who decided to get them reviewed.
Using the services of Gerald Eve, Eve was able to demonstrate the affect of the changes in the local area to secure a reduction in her business rates. “I’m thrilled. The Horseshoe is doing brilliantly but at the end of the day we are a small business and like any other small business we have to watch our overheads if we want to thrive.”