Thousands of pubs could get tax reduction

10th November 2008, 1:17pm

As the effects of the smoking ban become even more evident in the pub sector, thousands of pubs up and down the country could be in line for a tax reduction.

A report in this weekend's Telegraph said that the government's Valuation Office Agency, which decides a business's rate of tax, initially refused to give pubs any rate reduction because health campaigners predicted the smoking ban would bring more customers into pubs when it was enforced back in July 2007.

If a business can prove there has been a 'material change' to its trading position then this can qualify that business to a tax rate reduction.

With four pubs closing every day, the Conservative party believe the pub sector has most definitely gone through 'material change'.

Shadow local government secretary, Eric Pickles told the Telegraph what needs to be done: "Whilst massive pub chains may be making money out of Labour's 24-hour drinking laws, small everyday pubs are suffering from the onslaught of higher beer taxes, a weakening economy, supermarkets selling alcohol below cost price and the public smoking ban.

"Whatever people's views on the smoking ban, it has been a significant change that has affected many pubs. The Government's own tax inspectors have now admitted that pubs may be eligible for refunds on their business rates, but pub owners are being intentionally kept in the dark on this U-turn. This is yet another tax cover-up from the same bureaucrats who have conspired to hide council tax errors."

Guidance from the government's Valuation Office Agency, which was updated in June this year to include advice about the smoking ban, says: "It was not considered that this change [the smoking ban] could constitute a MCC [material change of circumstance] and earlier versions of this advice reflected this. Advice from counsel now shows this view to be wrong that the ban on smoking can be a matter affecting the physical enjoyment of a hereditament.

"In considering smoking ban proposals, VOs [valuation officers] need to envisage what rent would be have been paid for the hereditament at the AVD [original valuation date] assuming the ban was then in place affecting both the subject premises and other premises ... Proposals citing the ban on smoking should be re-examined."

To appeal against your rate of tax and find out more click here.

Related Articles:

• 01 Oct 2009 - Business leaders join council in condemning £500m London rates hike
• 30 Sep 2009 - EXCLUSIVE: £500m business rate bombshell facing central London hospitality firms
• 04 Mar 2009 - Record number of pubs closing
• 26 Feb 2009 - Tories want to save the great British pub

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