London rates rises could lead to pricier pints
London beer drinkers have been warned they could face paying more for their rounds from next year when crippling increases in business rates come into play.
Some of the oldest and best known London pubs are facing huge increases in their business rates bills as of April next year, when the next five year-long Rating List begins suggests CVS business rates specialists.
Across the capital, bills for pubs will increase by an average of 25.6% over the next five years, compared to just 9.2% for the rest of the country.
Where’s it worst?
Unsurprisingly, central London pubs bear the brunt of the rises. Over the next five years, pubs in Westminster will see their rates rise by an average of 43.2%, closely followed by Camden (39.8%), Southwark (36.4%) and Kensington & Chelsea (35.6%).
Pubs in outer London areas will see lower increases in their rates, with Bexley, Hounslow, Croydon, Havering and Bromley all set for bills increases of less than 10%.
The only area to see a fall in business rates on average will be Barking & Dagenham (-4.4%).
Soho’s O’Neill’s and 17th Century Anchor Bankside to take a heavy blow
The pub set for the biggest immediate rise in April next year will be an O’Neill’s branch on Wardour Street, Soho, which will have to find an extra £102,000 next year- a 31.5% increase, according to research carried out by CVS Surveyors.
Some of the capital’s longest-standing pubs will also be badly hit. The Anchor, located on the South Bank near London Bridge and Borough Market, will pay an average of £143,000 extra each year until 2022, taking its annual business rates to an average of £269,000 a year.
Chain pubs like the Wetherspoons at Camden Lock and Pitcher & Piano at Pollen Street, Oxford Circus, will pay an average of £137,000 and £131,000 extra each year respectively.
Other top risers include The Parcel Yard in King’s Cross station, The Shakespeare Tavern near Victoria station, and The Horniman near London Bridge.
The pint price-tag could well be on the up
Don’t be surprised if the price of a pint increases as of next year. London pubs are set for a business rates shock and they only have until April next year to prepare for this extra burden.
On the one hand, these increases are is a sign that the capital’s pubs have been in rude health over the past seven years. However, such a drastic rise in business rates could leave pub operators squeezed and – in severe cases – at greater risk of closure or redevelopment.
The Times are already reporting that the price of a pint across Britain is set to rise by a sobering 30p, and that pubs up and down the length of the country will have to sell a staggering 121million more pints to be able to afford the increase in business rates bills.
What can London pubs do?
Rating for pubs is notoriously complex. Unlike other rates assessments which are based on rents, valuations for pubs are based on an assessments ‘fair maintainable trade’, which is calculated using information on turnover, services offered, the local area and other factors.
Speaking to the London Evening Standard, Simon Emeny, Chief Executive of Chiswick-based Fuller’s, which has four pubs amongst the 30 worst-affected in London, said: “This is a significant blow to my firm and the wider pubs industry. Effectively, companies like mine are being punished for ploughing money into London and the South-East.
“We will find a way to absorb the new rates burden and cope, but I fear for some of the smaller operators… it could damage the future of some pubs in London.”
The Morning Advertiser spoke to the BBPA Chief Executive, Brigid Simmonds, who commented to them that they have “severe concerns” about the impact this could have on the trade, and that they have “responded to the Government consultation on transitional arrangements” to “mitigate the impact.”
Rating agents like CVS are encouraging pub landlords that, despite recent Government reforms which disadvantage ratepayers, it is possible to challenge these new assessments with professional support.