Surging business rates lead four pubs a day to close

Surging business rates have forced the closure of one in five pubs across England and Wales over the last six years, with more set to follow when rates rise again in April.

Data from rates and rents specialist CVS show that 11,443 pubs closed between April 2010 and the end of last year, the equivalent of four pubs every day.

This has reduced the number of pubs in England and Wales to 43,231, there lowest ever level.

CVS, which compiled the research for BBC Radio 4's You And Yours programme, said high business rates are a key factor behind the widespread closures.

The research body added rates are set for a further rise over the next five years following a government review of the current system, which comes into effect at the beginning of April.

The CVS research suggests that thousands pubs will have to pay more in business rates from the spring, with the overall bill set to jump by £421m ($523m) over the next five years.

This means pubs will have to pour an extra 121 million pints to fund the property tax increase, CVS said.

Business rates are a tax levied on firms that operate from a premises, and tend not to affect large internet firms such as eBay or Amazon. It is like a council tax on business properties and goes to the local authority to pay for street cleaning, roadworks and other services.

Unlike other taxes, it is not based on the firm's profits, but on the size of the buildings and their rental value if they were let out.

Property boom

As the property boom has pushed prices up by 50% in some areas over the past six years, business rates are set to jump in some parts of the country.

This means some pubs in central London face a 43% jump in rates, compared to bars and public houses Manchester that face a smaller 12% rise.

CVS chief executive Mark Rigby said the industry "faces unrealistic tax increases".

He added: "It's not our government and local councils who will lose out, but the pub sector overall."

A government spokesman said: "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."

But Beer and Pub Association chief executive Brigid Simmonds has said there is a "disproportionate tax burden bearing down on pubs".

She added: "Without action to reduce this burden, more of our much loved community pubs will be under threat."