Monday, 8 December 2008

Lincolnshire’s pubs being ripped off in tax inspectors’ cover-up

Government hides admission that pubs are paying too much in rates

Local pubs in Lincolnshire are being denied business rate cuts by the Government, Giles McNeill, Prospective Conservative Candidate for Lincolnshire County Council in the Nettleham & Saxilby Division, warned today. Pub landords could be paying thousands of pounds over the odds in tax, but are being kept in the dark by Government tax inspectors who want to avoid paying out tax refunds.

This follows a revelation earlier this year that tax inspectors were hiding the fact that hundreds of thousands of homes could be paying too much council tax. The tax officials kept quiet about the information to save money and save face.

• Five pubs closing every day: The British Beer & Pub Association has estimated that pubs are now closing at the rate of 36 a week - five a day. They are paying a heavy price for smoking ban, fragile consumer confidence, ruthless competition from supermarkets and – not least – higher beer taxes imposed by Gordon Brown.

• Government guidance on taxing pubs: Parliamentary Questions have brought to light unpublished internal guidance by the Valuation Office Agency (an arm of HM Revenue & Customs) on how local firms should be charged business rates. It admits that they have been giving out the wrong advice to firms on the effect of the smoking ban. Until recently, tax inspectors refused to give any business rate reduction for the loss of custom due to the ban. Their latest guidance now admits – thanks to advice from top lawyers – that the smoking ban represents a ‘material change’. Pubs can use this to make a claim for a lower ‘rateable value’ and so cut their yearly rates bill. For example, a £5,000 reduction in rateable value would save publicans £2,300 a year in tax.

• Local firms kept in the dark: Pubs can only apply for this tax cut if they make an appeal and fill out complex paperwork. The Government has made no announcement about potential refunds to local pubs across England and Wales. The Government is happy to hike tax bills, but it will not tell people when their bills could fall. Business rates are the third biggest cost to local firms after rent and staff costs.

Giles said:
“Local pubs in the villages that comprise the Nettleham & Saxilby Division are a vital part of our social fabric and community life. Whilst big pub chains may be making money out of Labour’s new drinking laws, small everyday pubs are suffering from the combined onslaught of higher beer taxes, a weakening economy, supermarkets selling alcohol below cost price and the smoking ban.

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

“Ministers are only interested in changing the tax system when it raises extra money for Gordon Brown’s coffers. Thanks to Whitehall secrecy and this stealth pub tax, local firms are going to the wall and everyday pub-goers are being hit in the wallet.”

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