Tuesday 19 June 2012

Who To Believe? The Trader, The Tax Expert, Or The Social Engineer?

Via F2C, it's good to see that the Clubs and Institutes Union haven't given up hope of a bit of sanity creeping into government decision-making.

In a report detailing events at their May conference, there was an account of Vice-President John Tobin's motion to call for separate smoking rooms in working men's clubs.
So-called independent reports had been submitted to the Government to the effect that there was no evidence of overall financial damage being done to industry as a result of the smoking ban. “What a load of rubbish,” he exclaimed. Less than two years into the ban, local authorities had been instructed to consider claims for reductions in business rates directly attributable to the ban. Bissett Kenning & Newiss represented about 700 clubs making a claim. Ninety-five per cent were successful and the average rebate was 10 per cent of rates to continue on a year-by-year basis. There is your firm evidence of real and substantial damage caused by the smoking ban’.
He is very well informed - but then, he would be considering he is 'in the trade' - because here is the relevant tax guidance from the Valuation Office Agency in 2008.
4.3) It was not considered that this change [the smoking ban] could constitute a [material change of circumstance] and earlier versions of this advice reflected this. Advice from counsel now shows this view to be wrong that the ban on smoking can be a matter affecting the physical enjoyment of a hereditament. In other words, how it can physically be used beneficially.

4.9) In considering smoking ban proposals, [valuation officers] need to envisage what rent would be have been paid for the hereditament at the [antecedent valuation date] assuming the ban was then in place affecting both the subject premises and other premises.
In short, it is accepted that businesses suffered a material loss as a result of the ban, and so business rate relief is merited for those who claim.

So we have a government agency admitting losses due to the ban, and physically rebating over 650 CIU clubs as a result. This is without taking into account the many more numerous affected pub operators, as Eric Pickles spoke strongly about while in opposition.
"Whatever people's views on the smoking ban, it has been a significant change that has affected many pubs. The Government's own tax inspectors have now admitted that pubs may be eligible for refunds on their business rates"
Very odd then, that the hastily swept-under-the-carpet government review of the ban - demanded by the original legislation on the third anniversary - found that there was no problem at all.

It was, however, written by Linda "rent-a-report" Bauld.

So who are we to believe? People who work in the industry day in, day out, and who are calling for an amendment to counter falling revenues; the rating agency which has decided that pubs and clubs have certainly suffered as a result of the smoking ban; government ministers who have stated on record that it is a material change to trading ... or some career anti-tobacco prohibitionist, with no grounding in business or commerce, who has never earned a productive penny in her life, and whose grant status relies on producing studies to please the Department of Health?

Hmm, whaddya think?


10 comments:

nisakiman said...

Crikey, that's a toughie, DP. I'm going to have to think about that one....

moonrakin said...

Mildly OT - but once these folk spot these things - there's going to be a banning event methinks....  vodka "1.50 a bottle - whoo - if that catches on there'll be much wailing and gnashing of teeth...

http://www.ebay.co.uk/itm/Amazing-Vodka-Machine-Still-smart-and-easy-way-make-great-spirits-/390426777495?pt=Home_Brew&hash=item5ae73fd797

Mark Wadsworth said...

Yeah! I'm with the trader on this one. The Business Rates (land value tax) point is very important - if a local council wants to up its tax receipts a bit* all it has to do is revoke the smoking ban (somehow by hook or by crook), by and large, pubs will be happy to pay the difference between the old higher rates (without ban) and the new lower rates (with ban) as a user charge.

Hooray, pubs make more money, councils get more money and we can smoke in pubs again!* Glossing over the fact that Business Rates are collected locally and pooled nationally.

Mark Wadsworth said...

Yeah! I'm with the trader on this one. The Business Rates (land value tax) point is very important - if a local council wants to up its tax receipts a bit* all it has to do is revoke the smoking ban (somehow by hook or by crook), by and large, pubs will be happy to pay the difference between the old higher rates (without ban) and the new lower rates (with ban) as a user charge.

Hooray, pubs make more money, councils get more money and we can smoke in pubs again!* Glossing over the fact that Business Rates are collected locally and pooled nationally.

Jax said...

Why aren't pubs claiming for this too?  Or perhaps they are, but if so I'm surprised that there isn't more publicity about it.  There must be thousands more pubs than working men's clubs who could claim a vast drop in profits since the smoking ban, and I'd have thought that the money-grubbing big pubcos would have been first in the queue.  Maybe the payouts to clubs have been kept very, very quiet in the hope that the pubs won't notice ...

Lysistrata Eleftheria said...

Dick, thanks for the h/t.
We are interested in looking at whether other leisure industries, e.g. pubs, bingo halls, cafes, shisha bars also claimed and were granted rate reductions after 2007-8 because of a dramatic and totally absolutely inexplicable drop in income. After all, we were told that the income of such businesses would increase. Some mistake, surely?

Fredrik Eich said...

Dick,

I have often had people argue that smoking is not part of the enjoyment of going to pubs only drinking is.

Seems others would disagree.



4.5 The previous CEO advice was that the ban does not represent a matter affecting the physical enjoyment of the public house because it can still be physically enjoyed as a public house. Smoking being merely an incidental activity by customers and not something which went to the heart of the beneficial use of a public house which would be the sale of alcohol for consumption on the premises. However counsel advises that this is not the test.

4.6 The test is whether there has been a change to matters affecting the physical activities that can be carried out rather than by any reference to the frequency with which an activity is carried out or whether it constitutes the main or a subsidiary activity in the hereditament.

4.7 It was accepted by CEO that the ban would have been a MCC for a club whose purpose was primarily smoking, e.g. of fine cigars or water pipes, and counsel could see no difference between the situation where smoking was the primary purpose of the use of the premises and where it was an incidental, albeit a major incidental activity in the premises.





I feel the rateable value claim is worth adding to the wiki on the smoking ban in England
 at some point.


http://en.wikipedia.org/wiki/Smoking_ban_in_England

Ivan D said...

Surely it must be Linda Dick. After all she has degrees in Politics and Social Policy and she is a Professor. She is also a government scientific adviser despite lacking any scientific credibility whatsoever so she must be really good.

I am quite certain that her review was objective in the extreme bearing in mind her affiliations as stated in her university profile:

"I am Vice-chair of the Cancer Research UK Tobacco Advisory Group, a member of the UK Centre for Tobacco Control Studies, the ASH Advisory
Council and the Scottish Tobacco Control Alliance. I am also Deputy
Editor of the journal 'Nicotine and Tobacco Research', a member of the International Network of Women Against Tobacco (INWAT) and the Social
Policy Association."

Linda is of course free to belong to all of these organisations but I have to wonder who in the DoH appointed her.

Ian R Thorpe said...

It seems more and more likely that laundering reality will be the biggest industry of the future. Anyone fancy a career in the Ministry of Truth.

Ivan D said...

You need a degree in something useless and not especially academic to apply.