Rachel Reeves is set to hit certain pubs with what has been branded a 'nice pub tax'. This will target country inns in 'character properties' found in 'attractive locations' across the UK. The move will change how pubs are assessed ahead of impending cost increases.
New Valuation Methodology
HMRC notes that rural properties should be 'character properties maintained to a high standard with good levels of amenity' in the tax bracket assessment. Essentially, pubs located in spots with scenic views, offering outdoor facilities, or serving premium-priced meals will face higher evaluations. Under the previous process, valuations took into account pandemic-era conditions, meaning many were lower. Now, each pub is assigned a rateable value based on its individual worth, resulting in an estimated £12 billion from the levy before the next review in 2029.
Conservative Backlash
The Conservative Party has branded the move a 'nice pub tax' targeting 'some of Britain's best boozers'. Shadow Communities Secretary Sir James Cleverly said: 'Labour's business rates raid is heaping misery onto struggling pubs across England. Having promised to get bills down, Rachel Reeves has instead sent them soaring. Under Labour, it will be last orders for countless beloved watering holes.'
Industry Reaction
Allen Simpson, chief executive of UKHospitality, said: 'We have long called for complete reform of the broken business rates system, which has seen hospitality pay far more than its fair share for decades. While an ongoing review of valuation methodology for pubs and hotels is positive, we still need the Government to deliver its commitment to lower rates bills for the entire hospitality sector. That is one of the critical ways to reduce hospitality’s cost burden, which is the highest in the economy.'
