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Why are some hospitality businesses still being charged the late-night levy?

28 January 2021 by
Why are some hospitality businesses still being charged the late-night levy?

Questions have been raised over why some hospitality businesses are still being charged the late-night levy despite having to remain closed.

One hospitality operator told The Caterer the tax ‘wiped out' their £3,000 government grant designed to support businesses through the pandemic.

Graham Harris, chief financial officer at the East London Pub Co, said local authorities were "giving with one hand and taking with the other".

Since 2012 some councils have charged the late-night levy on sites serving alcohol after midnight to cover costs such as extra policing. The annual fee can range from £299 to £4,400 depending on rateable value.

Councils are unable to cancel or freeze payments as the tax is set by central government, and last year trade bodies including UKHospitality called on ministers to intervene over the issue.

Harris said he paid the licence fee and levy to Camden Council in September 2019 at a cost of around £4,000, but his venues had hardly opened since March 2020. He has since been issued the bill from September 2020.

Harris said: "There doesn't seem to be any discount available. They are effectively asking us to pay for the next 12 months despite the fact we've hardly been open and are likely to remain closed for some time."

Councillor Richard Olszewski, cabinet member for finance and transformation at Camden Council, said local authorities did not have the legal powers to "suspend or vary" late-night levy fees.

He added: "Camden is however committed to working in partnership with those businesses impacted by the late-night levy to develop flexible options designed to mitigate the financial impact."

Many night-time businesses have been unable to open at all since March 2020, leading to thousands of job losses and permanent site closures. When The Caterer queried whether the government could temporarily freeze the tax, minister for crime and policing Kit Malthouse said councils could instead postpone suspending licences of businesses unable to pay.

He said: "I wrote to trade associations and chairs of licensing authorities making clear that local authorities have the power to delay action to suspend a licence until a business is able to trade again and pay the charge.

"It is open to local authorities to decide whether to cease their late-night levy at the end of each 12-month period."

Last year Newcastle City Council wrote to the government calling for the suspension or reduction of the tax, but was told by Malthouse there were no plans to do so. The council has now temporarily paused issuing invoices to licensed businesses and said it was continuing to lobby the government to change its position.

UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping have said businesses should be refunded any late-night fees they have had to pay while closed.

Michael Kill, chief executive of the Night Time Industries Association (NTIA), which represents 1,200 bars, clubs, casinos and music venues, called on the government to clear the debt owed by businesses unable to pay the late-night levy.

He said: "Local authorities and government cannot expect businesses to continue to pay late-night levy fees following nearly a year of limited trade or lockdown

"Businesses across the sector have clearly not received the services expected, and government needs to recognise this shortcoming and direct local authorities to wipe the historical debt clear for 2020."

The All-Party Parliamentary Group (APPG) for the night-time economy has launched an urgent inquiry into the impact of Covid-19 on British nightlife and is taking contributions here.

Photo: Shutterstock

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