Government Launches Late Night Levy Consultation for premises providing late night refreshment

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Following the consultation, the Government will analyse responses and publish a response on the proposed charges

Published: 11 January 2023 by Suraj Desor, senior associate solicitor

The Government has now launched the long overdue Consultation on the Late Night Levy charge that will be applicable to premises in England & Wales that provide late night refreshment (defined as the supply of hot food and hot drink to the public between 11pm and 5am).

As a reminder, the Late Night Levy, where adopted, is an additional annual fee that operators of licensed premises within the local authority area must pay if their premises licence or club certificate authorises the sale of alcohol during a specified period between midnight and 6am (subject to a small number of exemptions).

The Levy was introduced in 2012, however there has been a lack of take up from local authorities – currently only 9 have the Levy in place, one of which, Liverpool, is considering removing it. Cheltenham, Southampton and Nottingham removed their Levies in favour of a BID (Business Improvement District), the latter being considered a better and more flexible alternative.

A key criticism of the Levy has been that it is inflexible (applying to either the whole of a local authority’s jurisdiction or not at all), unfair in terms of which businesses pay the levy and that the use of proceeds lacks transparency. To address these criticisms the Government sought to improve the Late Night Levy and make its use more appealing for local authorities. As a result, section 142 of the Policing and Crime Act 2017 (and related Schedule 18) introduced several changes to the late night levy which include:

to charge late night refreshment (LNR) premises the levy to assist with the cost of policing the night time economy
to give licensing authorities the flexibility to apply the levy to only designated areas rather than simply the whole area, and to allow different late night levy requirements to apply in different parts of its area
to give the local policing body (Police & Crime Commissioners (PCCs)) the right to request that a licensing authority formally propose a levy
requiring licensing authorities to publish information about how the revenue raised from the levy is spent.
However, these have not yet taken effect because the Government pledged to first consult on the level of charge to be applicable to premises providing Late Night Refreshment.

That consultation is now underway and closes on 3 April 2023. The consultation sets out two proposals for the charges to be applicable to late night refreshment premises.

  1. Option 1 – Base the Late Night Levy charges on the current licence fee system as for alcohol venues, with no option for licensing authorities to apply a discount (with those premises being placed in bands based on their premises rateable value)
  2. Option 2 – the same as Option 1 but to allow the option for licensing authorities to offer a 30% discount to those Late Night Refreshment premises qualifying for the Small Business Rate Relief.
    In respect of Option 2 the consultation states “The Government is mindful of not imposing unnecessary or disproportionate charges on LNR premises as many are small businesses and, by definition, are licensed to be open late at night”.

It is worth noting that premises supplying Late Night Refreshment will only be charged the late night levy in areas where licensing authorities decide that they place demands on police resources in the night time economy.

In each area, Licensing Authorities will have the option of charging either 1. premises licensed to sell alcohol or 2. premises licensed to sell alcohol and premises licensed to provide late night refreshment. What this means is that licensing authorities will not be permitted to impose a late night levy solely on premises providing late night refreshment.

To put it more practically, if there is a Levy in your area it will always catch those premises who sell alcohol during the hours specified in the Levy. It may also, if the licensing authority decides, catch those premises providing late night refreshment, if they are not already caught by the fact that they also sell alcohol during those times.

Following the consultation, the Government will analyse responses and publish a response setting out its intentions, which should bring us closer to the legislative changes made to the Late Night Levy coming into effect.

Further details on the consultation and how to respond can be found on the Government website, link here Late night levy – GOV.UK (www.gov.uk)

For further information or queries, please feel free to contact any of our licensing solicitors.

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