Expert advice: the late-night levy

Look out for the levy, warns John Gaunt of licensing solicitors John Gaunt & Partners

The late-night levy, which became law on October 31, can be adopted by any licensing authority, thereby enabling it to charge a levy on premises licensed to sell (and not just those which actually sell) alcohol in the late-night economy. It is intended, in part, to assist with the costs of policing.

If adopted, it applies to all premises affected throughout the whole of the local authority’s area. The amount of the levy is prescribed nationally and is based on rateable value bands. However, it is within the discretion of local authorities whether to charge businesses that are entitled to trade late. It will be for the local authority to decide the period during which the levy applies between midnight and 6am. Where, for example, they determine that the levy would apply to premises licensed to operate beyond midnight, then, subject to limited exemptions and discounts, all premises licensed beyond this time would be caught.

The requirement for the levy is likely to arise out of discussions with the police locally – or at their instigation. Once it is thought necessary or advisable to introduce the levy, the local authority must issue a consultation. All premises likely to be affected must be consulted and it is very important at this stage that, if affected, you make your opinion known. The final decision must be signed off by the full council.

If you are affected, you will need to make a commercial decision as to whether you wish to continue with your existing entitlement to trade or whether you will amend the terms of your current licence to take you out of the ambit of the charge. You are likely to have a two-month window of opportunity to do so and, if you apply to reduce your trading hours within this period, no fee for the variation application will be payable to the council.

Once adopted, the levy will apply indefinitely until such time as the council decides to cease it. Temporary event notices and trading over New Year’s Eve will not trigger the imposition of the levy per se.

The local authority can – in its discretion – choose to exempt certain categories of premises specified by the government, but these categories are very limited and are unlikely to apply to readers of this magazine. Similarly, the local authority has the discretion to allow reductions in the amount payable under the levy up to a maximum of 30 per cent for premises which participate in other “business-led best practice schemes”.

Revenue raised from the levy will be split between the licensing authority and the police, but the authority must pay over at least 70 per cent of the net levy to the police. There is no regulation as to how the police must spend their share of the revenues raised – they need not actually apply it to assisting with the policing the late night-economy!

So, keep your ear to the ground and seek immediate advice the moment you hear of a proposal to adopt the levy.

Originally published in the December 2012 edition of Bar magazine.

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