Nightclubs face higher business rates next year despite sector turmoil

Nightclubs across the UK face higher property taxes next year despite being battered by the pandemic in the latest “hammer blow” for the sector, according to new data.

The new business rates rules unveiled in last month’s budget handed many high street firms lower tax bills from April next year.

Pubs and high street shops are among those due to benefit from the revaluation.

However, new analysis from property experts Gerald Eve has found that nightclubs – which suffered particularly heavy restrictions during pandemic lockdowns – will see their bills rise on average next year.

Data shows that nightclubs will see their rates bills up by 1% on average, despite the property valuations the tax is based on taking place in April 2021 at the height of the Covid pandemic.

Valuation Office Agency (VOA) figures showed particularly sharp spikes for a number of venues.

Hackney venue Oslo faces a 376% rise in its rateable value, while Bristol nightclub Gravity has seen its value rise by 102%.

Michael Kill, chief executive of Night Time Industries Association (NTIA), told the PA news agency he discussed the higher tax burden on clubs with Government officials earlier this week.

“We are talking to nightclub owners daily at the moment and people are starting to decide if they can actually continue to keep running in this environment,” he said.

“This just feels like another hammer blow at a time when it just feels like pressure on top of pressure for the industry.

“For operators, it just does not feel fair. In the past few weeks trade has dropped by about 15% because of the cost of living, costs are still going up, alcohol duty will go up on spirits in February which will really hit these venues.

“There’s still energy rises on the horizon for many so higher rates is just another burden.”

The trade body chief said that a number of operators had already said they will appeal over increases to their rate bills.

Experts at Gerald Eve said they had expected to see rates bills fall due to the impact of the pandemic on late-night venues.

Pubs also suffered heavily and this was reflected in the assessments carried out by the VOA, with boozers seeing their bills fall by 13.5% on average.

Nightclubs were arguably the hardest-hit businesses in the country during the pandemic.

Julian Jennings, a business rates partner at Gerald Eve, said: “Nightclubs were arguably the hardest-hit businesses in the country during the pandemic.

“They were the last to reopen during the various lockdowns, the public were told to avoid large crowds and enclosed spaces and their customer base was the last to receive a vaccine.

“When you think the revaluation assessments took place in April 2021 whilst Covid was still rampant, it’s bizarre to think with all the issues facing the sector at that time that the Valuation Office thought so many valuations had somehow risen.

“Some areas did see falls, in particular central London, but the overall picture is of rises, which many would not have expected to see.

“Operators are finally starting to recover and looking forward to a successful festive season, so it will be a real body blow to be told despite all the challenges, their business rates bills will go up from April.”