The Government’s intention to proceed with the Non-Domestic Rating (Lists) Bill, first introduced in Parliament in on 18th March, which will bring forward the next Revaluation of business rates to 1st April 2021, based upon an Antecedent Valuation Date well before the Covid-19 pandemic, could be potentially disastrous for pubs and their future viability.
It seems wholly inappropriate to set new tax liabilities from 1st April 2021, for a minimum of 3 financial years thereafter, based upon fair maintainable trade for pubs and licensed premises on 1st April 2019.
New Rateable Values would then be based upon facts a year before the pandemic adversely affected the hospitality sector and potentially will have the devastating impact of setting valuations at an artificially high level especially for pubs and licensed premises.
It is has to be far better economically to tie new Rateable Values to post Covid-19 emerging economic circumstances with physical circumstances a year in advance when matters will have more chance of being back to relative normality.
Recovery from the economic effects of Coronavirus and the feeling of being on “the other side” will take considerable time to materialise. A tax base that does not fit with this overall psychology is in danger of being seen as not being fit for purpose.
A Revaluation in 2022, with an Antecedent Valuation Date in 2021, would provide a complete reset of Rateable Values, taking into account the state of the market after this crisis has passed.
Having the underlying evidential economic base as close as practicable to the compilation of physical factors must be the appropriate and desired way forward to help pubs and licensed premises navigate their way out of the current financial crisis caused by the pandemic.
Pubs and licensed premises deserve, at the very least, a fresh collective look with the aim of the next rating tax base being both accepted and fundamentally correct from the start of the next new rating list. A 2021 revaluation cannot provide that cornerstone.
This Bill could be hugely damaging for years to come hindering the pub trade’s road to recovery from the Coronavirus.
Head of UK Business Rates