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).
£140,000 for every pub
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.
Business Rates six times more than they should be
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.
Call for immediate relief
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.”
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