Crippling business rates bills are threatening the existence of some of London’s most well-known nightlife venues, new research has revealed.
According to real estate company Colliers International, nightclubs in the capital, which have already been hit by soaring rents and inflation, look increasingly vulnerable to an increase in business rates, after they already went up in April last year.
KOKO on Camden High Street saw its rateable value, which refers to the value of a property upon which a tax is calculated, rocket in 2017, meaning that its business rates rose by almost 60 per cent from £75,482 for the financial year 2016/17 to £118,519 in 2017/18.
The rateable value of Camden club UnderSolo, Dirty Bones in Soho and Leicester Square clubs Café De Paris and Cirque Le Soir also increased sharply.
John Webber, who oversees business rates at Colliers, said that this does not indicate that the clubs won’t survive, but it does demonstrate the pressure the industry is under.
Business rates are a tax charged on business properties, such as shops, offices and pubs. They were raised for the first time in seven years last April.
Earlier this week, Kensington Roof Gardens – owned by Sir Richard Branson - said it was closing after struggling to make a profit.
The club, which boasts three themed gardens, a running stream and four resident flamingos, was bought by Virgin in 1981 but has decided not to renew its lease agreement.
Colliers said that the club has seen a rise in rateable value from £402,500 in 2010 to £590,000 in 2017.
In terms of actual rates paid, this means the venue’s rates bill would have been over £86,000 higher this year than last, at £294,410, according Colliers. By the financial year 2021/22, Kensington Roof Gardens would have been paying a rates bill of £328,630 a year.
Mr Webber also said that businesses were coming under pressure as a result of the rise in the national living wage and an increase in inflation.
“There has been a lot of comment about how pubs and bars across the country are closing because of onerous business rate rises, but it’s interesting that the high-end London leisure scene is being affected too,” he said.
