Licensee hit by 'outrageous' 200% rates increase

Claire Dodd

Claire Dodd

03 March 2017

A music pub licensee hit with a 200% business rates increase has described the situation facing many venues from April as 'outrageous' and 'unsustainable'.

Stacey Thomas took on the Lexington, in Pentonville Road in Islington, London in 2008. After spending the last two years contesting a rent increase which culminated with a 40% hike, Thomas now faces a business rates bill of £200,000.

The business, which regularly hosts live music, does qualify for transitional relief, but will still be due to pay £44,000, an increase of £14,000 a year. Thomas said plans to open a second venue were now on hold and the venues' ability to champion new music acts was under threat as the business may no longer be able to take the financial risk. A number of high profile acts including Mumford & Sons have played the pub before reaching mainstream success.

'You work really hard through a recession, you open just as the economy falls apart in 2008, you get through it and then this is what happens,' said Thomas. 'With our rent increase too, our annual costs have gone up by around £55,000. That’s not sustainable.

'We are being penalised for being successful. Not just by the government but by the landlords as well. There are lots of associated costs with running a music venue. This increase really eats into our profit margins and will affect our ability to book or support grassroots artists. This is not what we signed up for.'

Thomas was among a number of Islington traders to march on Whitehall this week to deliver a 12,658-strong petition calling for the government to freeze rates increases until after Britain leaves the EU, and to extend transitional relief. The petition is backed by the local council, the chamber of commerce and Angel Business Improvement District, with the area facing the third highest hike in the country with an average increase of 45%.

As reported in Imbibe, there have been increasing calls from across the industry for the government to address the potentially 'catastrophic' effect of business rate increases, in its Budget on 8 March.

Rates are set to dramatically increase from 1 April 2017, as new rateable values based on 1 April 2015 come into force. Usually reassessed every five years, the previous rateable values set in 2010 were based on property values in 2008, meaning many businesses are set to experience a steep increase.

A group of trade bodies, representing over 100,000 businesses also joined forces this week to lobby the government to take action to lessen the impact of business rate increases in April. Signatories include the Association of Licensed Multiple Retailers, the British Beer and Pub Association, the British Chambers of Commerce, the British Hospitality Association, the Confederation of British Industry, and the Federation of Small Businesses.

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