15 pubs a week close as business rates skyrocket

Pubs across England and Wales are ‘disappearing’ at a rate of around 15 a week, as rising business rates hit the sector hard.

Some 390 pubs shut their doors between the start of April and the end of September, after the industry was hit with a £204 million increase in business rates.

The realignment of business rates in April – the first time in seven years that rates were recalculated – also means that consumers could face more expensive pints in the future.

Business rates for public houses has jumped 14% to reach £1.6 billion for the next five years, business rent and rates specialist CVS has said.

The issue is exacerbated as the British pub industry also has to face up to rising inflation from next April alongside the removal of an annual £1,000 business rates discount.

CVS Chief Executive Mark Rigby has warned that pubs may have to pass on the costs to customers and he has called on the Chancellor to address the issue in the Autumn Budget.

Freezing rate increases in April 2018 could be one option while transitional relief to cover the rates increases could also ease the burden for some pubs.

He adds that the number of pubs being forced to close could be even higher than the figures, as empty pubs still pay rates once a three month exemption period following closure is complete.

A cap is already in place for 2018-2019, which is set at 7.5% plus inflation for small properties, which rises to 17.5% and 32%, both plus inflation, for medium and larger properties respectively.

Rates will rise in line with inflation again next April, as per the September Retail Price Index figure of 3.9%.

Based on that figure, more than 20,500 pubs in England and Wales will see above inflation rates increases totalling nearly £60 million in 2018.

That equates to around £2,900 per pub, meaning more businesses could be left facing insolvency throughout next year as they are simply unable to cope with the increases.

The CVA has suggested that 6,696 small pubs will need to overcome above inflation increases, as well as 12,818 medium-sized venues and 1,000 large pubs that will be in similar positions.

Those in the sector should contact corporate insolvency practitioners for advice if they fear financial difficulty or even just to assess what their options might be.

Conducting an independent business review can act as a health check for a business or to develop a long-term strategy to create more practical approaches to business.


By Phil Smith


If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1144.

View all Business Insights