Budget 2017: Pubs and restaurants demand rates relief

A trade body representing pubs and restaurants all over the UK has warned the Chancellor that there will be mass closures on high streets unless he offers tax relief in next month's Budget.

From April the business rates paid by companies that trade out of physical properties are changing as re-calculations from a review already delayed by two years finally come into effect.

Rates are related to property values and are usually updated every five years. The delay means that this year the changes to existing rates are substantial and will create "big winners and losers", says The Times.

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"Rates will fall for 920,000 businesses, remain the same for another 420,000, and increase for 510,000," the paper adds.

Companies set to lose out are mostly in south-east England. Many are in the hospitality industry, with some pub landlords saying they will eventually face rates increases in excess of 500 per cent.

A £3.6bn transition relief scheme will ensure these costs are phased in over five years, but from this year ministers have increased the cap on bill hikes from 12.5 per cent to 42 per cent.

The BBC says the reforms will be "revenue neutral" for the Treasury, but the Association of Licensed Multiple Retailers says the government needs to invest more to soften the blow further.

In an open letter to Chancellor Philip Hammond, the trade body warns that the hospitality sector is facing additional costs of £300m to £500m a year. It says the government should introduce a permanent sector-specific relief.

A spokesman for the Department for Communities and Local Government said: "The great British pub is a national asset, providing thousands of jobs and boosting the economy by £21bn a year.

"The method of valuing pubs was agreed by the five major trade bodies and has not changed.

"Following the revaluation, three quarters of properties will see no change or even a fall in their bills, and the small minority of businesses that face an increase will benefit from our £3.6bn transitional relief scheme."