In March 2020, the chancellor Rishi Sunak announced that business rates would be abolished for one year for small companies in England with a rateable value of less than £51,000, including pharmacies.
In July 2021, the relief became a 66% discount off business rate bills – an arrangement the National Pharmacy Association (NPA) flagged this week is due to end on March 31.
Read more: Multiples welcome MPs' call to reform ‘broken’ business rates system
More to fear than business rates
Though rising business rates are worrying, pharmacies face “a more sinister threat”, Dr Hannbeck told C+D today (March 11).
Pharmacies are up against high rates of closures because of funding cuts, which she said amounted to “a 60% pay cut” for pharmacies.
Community pharmacy is not operating on a level playing field, Dr Hannbeck said.
Noting “further cost increases”, such as the return of full business rates and “the decimation of pharmacy’s workforce by [primary care networks]”, Dr Hannbeck questioned whether “there still is an objective in the NHS to force 3,000 pharmacies into random, unplanned closures”.
“It is often forgotten that independent community pharmacies typically derive over 90% of their remuneration from NHS activity,” she added, made harder by the “volatility to category M caused by supply challenges”.
The system’s uncertainty “impacts the ongoing profitability” of pharmacy and disrupts contractors’ “working capital”, presenting “a more sinister threat than [rising business] rates”, according to Dr Hannbeck.
Business rate renewal “painful for independent pharmacies”
NPA chief executive Mark Lyonette said business rates are still a “cost burden that will really hurt” pharmacists.
“The costs of running pharmacies keeps rising,” he continued, with staff and energy prices “going through the roof”.
He called on the government and the NHS to recognise “this inflationary pressure […] as a problem that requires a meaningful response in terms of funding”.
NPA board member Olivier Picard shared it was “becoming increasingly difficult to see how the rising cost of doing business can be absorbed without affecting patient care”.
His rates of renewal at the end of the business rate exemption period this month would cost him “thousands across [his] four pharmacies”, he said.
Read more: CCA chief: Business rates don’t reflect community pharmacy's role
