Autumn Statement: Industry welcomes small business rate relief

Claire Dodd

Claire Dodd

25 November 2015

On-trade campaigners have welcomed George Osborne’s announcement this afternoon that small business rate relief has been extended for another year, but renewed calls on the Government to go further.

The announcement, made as Osborne delivered his Autumn Statement, will extend rate relief from 50% to 100% for businesses with one property, with a rateable value of less than £12,000 for a further year. It is expected to benefit around a third (approximately 15,000) of pubs, delivering around £25m in savings.

However trade bodies have said the move does not go far enough and called Osborne’s failure to announce a complete overhaul of the system disappointing, unsustainable, and unfair.

Trade groups including the British Beer & Pub Association (BBPA); Association of Licensed Multiple Retailers (ALMR); Federation of Licensed Victuallers Associations (FLVA); British Institute of Innkeeping (BII); Society of Independent Brewers (SIBA); Brewing, Food & Beverage Industry Suppliers Association (BFBI); The British Soft Drinks Association (BSDA); and Guild of Master Victuallers (GMV), last week joined together to pen an open letter to the Chancellor. It called for a freeze in the business rates multiplier, which would be worth around £5m across the sector.

ALMR chief executive Kate Nicholls said: 'It is disappointing to see that once again we are in a position of urging the Government to hasten with real and meaningful change to the business rates system and to bring about root and branch reform.

'This is increasingly a system that sees business relying on multiple discounts and allowances and is a recipe for confusion or avoidance, something the Treasury has already highlighted.

'The licensed hospitality sector is carrying an enormous burden in the shape of business rates, with pubs accounting for 2.8% of all UK tax receipts; a situation that is plainly unfair and unsustainable for some businesses. The Chancellor indicated that the review of business rates will report at next year’s Budget Statement and we are hopeful that it will bring with it good news for the sector.'

There was also criticism of Osborne’s decision to not extend retail relief. BBPA chief executive Brigid Simmonds said: 'It is very disappointing that the Chancellor has not extended retail relief for a further year – this is effectively a £1,500 tax increase for the majority of pubs, and will add £46 million to pubs’ rates bills.

'Retail relief was providing a discount for pubs with a rateable value of £50,000 or less, which is 75% of all pubs. This is a particular problem in the run-up to the revaluation in 2017 as rates bills have become out of kilter with the value of individual businesses.'

The ALMR also raised concerns about the costs associated with the upcoming introduction of the apprenticeship levy. The levy will see UK employers pay towards apprenticeship training nationally. The apprenticeship levy will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill. A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3 million, meaning less than 2% of UK employers are expected to pay the levy.

Martin Couchman OBE, deputy chief executive of the British Hospitality Association commented: 'We are pleased that 98 per cent of businesses will not be paying the apprenticeship levy because of the £15,000 payroll threshold announced in the Autumn Statement. We await details of how smaller businesses will be supported in training apprentices. We are pleased to see that a new employer led body will set apprenticeship standards and ensure quality, but note that the hospitality industry has already made a lot of progress in developing apprenticeship standards.'

Updated 25/11/2015 with details of the apprenticeship levy, and with comment from the BHA.

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