HM Treasury announced this week a review of the process used to value pub and hotel businesses to calculate their rates bills. The review, led by the rating and valuation expert Jerry Schurder, includes a call for evidence seeking views from landlords, hoteliers and other business owners so they can be represented directly.

Business rates have been making headlines and causing headaches since the last budget coincided with a Valuation Office Agency recalculation that saw hospitality businesses valuation increases of an average of 30%, applied distinctly unevenly between businesses and locations. Faced with a furious reaction from the sector the Treasury then scrambled to make amends, culminating in last month’s announcement of a 20% rate bill cut for pubs and live music venues from next April, on top of the 15% reduction announced in April of this year.

The government says that the review announced this week “will look at improving fairness for businesses working with them to ensure the system is fair and transparent, and ensure pubs and hotels can plan better for the future”, while the call for evidence “will ensure landlords, brewers, hoteliers and business owners are properly represented in the process.” It quoted approving remarks from industry representatives at UKHospitality, the British Beer and Pub Association, Greene King and Marriott International.

The Countryside Alliance has consistently argued that the business rates system fails to take account the realities of the business environment in rural Britain and needs fundamental reform. As we highlighted last month:

“The rates valuation increase was criticised as penalising pubs based in heritage buildings in attractive rural locations, on the theory that their inherent appeal to consumers made them capable of generating greater revenues – despite their isolation requiring them to work all the harder to position themselves as destination businesses, given their limited local footfall.”

Most importantly, we need to move towards a system where business owners are no longer penalised through higher valuations and bills for investing in their business to improve their productivity and attractiveness to customers. These are positive outcomes that it runs counter to the government’s drive for growth for the tax system to disincentivise. A review of the methodology behind rates calculations for pubs and hotels may not be a panacea and will not be the end of the conversation, but it may very well be a positive early step.

If you are running a business that has been impacted by an unfair rates valuation, we would urge you to take part in the call for evidence so that your experience and the impact it has had on your business can be fully considered as the government reviews the system’s future.