A tax on businesses that stay open beyond midnight has been scrapped despite opposition from the police. The Late Night Levy was introduced in 2014 and money taken from pubs, bars and shops had been used to support policing in Nottingham City Centre.
Currently 144 businesses qualify to pay the tax, which ranged from £299 a year for smaller properties to £4,440 for larger venues. An exemption was however agreed for members of the Business Improvement District (BID), which includes a large proportion of city venues, and this reduced the income from the levy to around £67,000 a year, according to Nottingham City Council.
As such the levy therefore disproportionately impacted smaller, family-run businesses in neighbourhoods outside the city centre which could not be part of the BID. The Labour-run council says 96 of the 144 businesses were based outside the city centre.
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Dales ward councillor Neghat Khan, who is the portfolio holder for neighbourhoods and safety, says the economic situation for the hospitality industry has changed since the tax was brought in eight years ago, and the council feels the levy is "placing a difficult burden on existing licensed trade businesses and could be a barrier to incoming or expanding businesses".
During a meeting of the full council on September 12 she said: "Through the pandemic it was small, local shops that kept many of us going. We need to show these small, family-run businesses that we understand the pressures they are under.
"The levy was an idea we had to try and route-out crime and anti-social behaviour that affects so many of our residents. Figures from the police show the majority of alcohol-related crime is in the city centre.
"We've consulted with businesses and every one of them in the city centre said it was time to scrap this levy. The police and crime commissioner said they would like to keep it, but we have to have a balance, balance the harm it has against the very modest amounts of money it brings in.
"We can't show any compelling evidence the levy works in the way we hoped. It is a regressive tax and the burden is on those that don't really feel the problem. Our local businesses are under pressure, the cost of living crisis is affecting them and we need to do what we can to help."
Police and Crime Commissioner Caroline Henry said an independent study into the tax was conducted after she was elected. The recommendations of this included funding a permanent multiagency safe space, expanding CCTV coverage, taxi marshals and enhanced enforcement.
And Superintendent Kathryn Craner, of Nottinghamshire Police, had said scrapping the scheme could reduce more safety measures going forward, adding: "The removal of measures to prevent saturation of licensed premises, plus removal of the Late Night Levy contribution, could reduce the partnership opportunity to put additional safety measures in place to reduce anti-social behaviour and violence associated with alcohol consumption."
Similarly some venue owners believed the scrapping of the tax could prove troublesome. Jamie Barnes, operations manager at Fletchergate Industries, which owns venues including Blind Rabbit, Das Kino and Penny Lane, said: “On the surface, the removal of the Late Night Levy seems like a great way to put money back in businesses’ pockets and help the city’s nightlife to recover, protecting the Nottingham hospitality industry. However, in reality, many bars are exempt from the Levy as members of the Nottingham BID.
"Without the incentive of avoiding the levy, businesses might choose not to join the BID, reducing its overall impact. The BID does some great work in the city and takes steps to improve Nottingham for everyone, including a valuable lighting project that illuminated walkways in the city and continues to make Nottingham a safer night out.
"While we’re always in favour of boosting the hospitality industry, reducing the Late Night Levy might end up doing more harm than good and other ways of increasing investment into Nottingham’s nightlife could be more beneficial.”
Nottingham City Council however argues the BID continues to fund other late night support schemes such as street pastors and taxi marshals through its membership subscriptions, which many city centre venues already pay. The authority also emphasised the police force is expected to receive £13m more in funding for the 2022/23 financial year, rising to £250.2m which will be distributed by the police and crime commissioner.
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