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Business rates 'simply unjustifiable' - Oakman Inns CEO
09/03/2017 - 09:36
Peter Borg-Neal, CEO of pub company Oakman Inns, has said the Chancellor's business rates relief 'does nothing to lessen the impact of this ridiculous and unfair system'.
Written by Andrew McClean
The relief was announced yesterday in the Spring Budget and offers a £1,000 discount for pubs with rateable value less than £100,000, which the Chancellor expects to benefit 90% of British pubs.
However, the Oakman Inns CEO believes the relief will be of little benefit to his company and will only reduce the impact of the business rates rise from 45% to around 43%, which he called 'simply unjustifiable'.
Borg-Neal, said: "This 'relief' does nothing to lessen the impact of this ridiculous and unfair system. The result of the increase in business rates will inevitably reduce our profits and, consequently, our ability to raise further investment funds through bank debt.
"This has an immediate impact as we will now open two fewer pubs in the coming financial year. Given that the average Oakman Inn pays annual taxes of circa £496k it will mean that there will be a net reduction in income to the Treasury.
"Furthermore, the decision to once again delay for the foreseeable future, a ‘root and branch’ review of the business rates system, is deeply disappointing. It displays a woeful lack of understanding of the economic impact that these unplanned and irregularly-timed actions have on businesses of our size."
Dougal Sharp, founder & master brewer of Innis & Gunn, also expressed his disappointment in the rise in alcohol duty, which is due to rise with inflation.
Sharp said: "We welcomed the freeze in beer duty last year and we were hoping for a similar positive incentive from the Chancellor this time around. It is incredibly disappointing to see an increase in alcohol duty in the latest budget, consumers are going to be hit hardest by this rise and I fear for the impact it will have on pubs already facing enormous pressures.
"We're in the middle of a beer boom in Scotland, with over 100 active breweries for the first time in over a century; we have recently invested over £750,000 in increasing capacity at our own brewery, and the government should be doing all that it can to support our industry.”