Nightclubs face higher business rates next year in latest ‘hammer blow’ for the sector

Press Association

According to new data, nightclubs in the UK will be subject to higher property taxes in the next year due to the latest “hammer blow” to this sector.

New business rate rules, which were revealed in the budget last month, allowed many high-street businesses to have lower tax bills than April next.

The reassessment would be beneficial for bars and shops.

A new analysis by Gerald Eve, a real estate expert, shows that nightclubs, which have been subject to severe restrictions during the pandemic lockdowns, will see their average bills increase next year.

The data suggests that nightclubs’ prices will rise by 1%, despite the fact that the tax was based on property valuations in April 2021, at the height of Covid pandemic.

VOA numbers showed significant rises in several places.

The relative value of Oslo in Hackney has increased by 376 percent, while Gravity in Bristol has seen a 102% increase.

Michael Kell (CEO of the Nightlife Industries Association) told the PA news agency he had earlier this week discussed the increased tax burden on clubs with officials from the government.

He said, “We talk to nightclub owner every day right now and people are beginning to decide if it is possible to keep running in such an environment.”

“This feels like another hammer blow at a time that seems like over the top pressure on the industry.

“For the operators, it just doesn’t seem fair. Commerce has dropped by about 15% in the last few weeks due to rising costs. Liquor charges will rise in February which will really hit these areas.

“Energy is still rising for many, so higher rates are just another burden.”

The head of the trade association stated that operators had already indicated they would appeal for an increase in their rates.

Gerald Eve experts said that they expected lower prices due to the effects of the pandemic at late-night venues.

Bars have also been hard hit, as shown by VOA ratings, where alcoholic drinkers saw average bills drop by 13.5 per cent.

Nightclubs were probably the hardest hit by the pandemic.

Julian Jennings, business pricing partner at Gerald Eve, said: “Nightclubs have arguably been the hardest hit business 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 closed spaces and their customer base was the last to get a vaccine.

“When you think that the revaluations were done in April 2021 while Covid was still rampant, it is strange to think of all the problems facing the sector at that time that the evaluation office thought many of the evaluations were up in some way.

While some areas have seen declines (e.g. central London), the overall picture shows rises that many didn’t expect.

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