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Pubs carrying huge tax burden from business rates, new report shows

23/11/15


  • Total tax bill is £7.3 billion, or £140,000 for every pub – 34 per cent of turnover
  • Pubs paying second highest business rates bill of 67 sectors, says report – SIX times higher than justified
  • More reliefs needed in Autumn Statement, says BBPA Chief Executive

Britain’s pubs carry one of the heaviest tax burdens in the UK economy, says a new report from Oxford Economics for the British Beer & Pub Association (BBPA).


The full report shows that the industry’s total tax bill amounts to a staggering £7.3 billion, or £140,000 for every pub, representing 34 pence in every pound of turnover. In terms of the total tax bill, “costs were £800m larger than the ‘gambling and betting’ sector,” the report says.


In the new report, Oxford Economics concludes that "the pub industry was found to have a tax burden which was larger than a large proportion of the sectors studied in this report."


VAT, excise duty and business rates are the main burdens, the report finds.


Along with beer duty, the bill for business rates has been causing pubs particular problems. Rates are intended to reflect the rental value of properties, and for pubs this is based on their expected turnover. However, the current valuations are based on 2008 trading performance.


As pubs have struggled, this has led to them being massively overburdened, paying a staggering six times (£600 million) more than they should be paying (£100 million) per year, if their bills were in line with sales. Indeed, the Oxford Economics report finds that in terms of per pound of turnover, pubs pay the second highest business rates bill among the 67 sectors studied.


The BBPA last week wrote jointly, along with other trade associations, to the Chancellor calling for a range of immediate reliefs on business rates in this week’s Autumn Statement.


BBPA Chief Executive Brigid Simmonds comments:


“This new report sets out the stark reality of the disproportionate tax burden bearing down on pubs. Without action to reduce this burden, more of our much loved community pubs will be under threat. The Chancellor has taken action on beer duty, and to relieve the burden of business rates on pubs in his previous two Autumn Statements, but there is no doubt that more relief and reform is needed."


Notes to editors:

The Full report from Oxford Economics, The average British pub’s costs and tax contribution; sectoral comparisons (November 2015) is now available on the BBPA website here.


The joint letter from beer and pub industry bodies to the Chancellor is available on the BBPA website here. The letter calls on the Government to:


  • Freeze the business rates multiplier, benefiting all pubs and worth around £5m to the sector
  • Extend small business rate relief for another year, benefitting a third of pubs, or 15,000 pubs
  • Apply Retail Relief for another year – a scheme that provides a discount for pubs with a rateable value of £50k or less – and increase the discount to £2,000 per annum, per pub

The British Beer & Pub Association is the leading body representing Britain’s brewers and pub companies. The Association is more than a century old and was originally founded as the Brewers’ Society in 1904. Our members account for some 90 per cent of beer brewed in Britain today, and own around 20,000 of the nation’s pubs.


Resources

» One Voice Budget letter 18 Oct 17



Tags:

Business rates


For further information contact:

Neil Williams
Head of Media
nwilliams@beerandpub.com
Tel: 020 7627 9156 / 07974 249 779


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