Tax and labour increases costing average pub £14,000, says industry body

Tax increases and the rise in the minimum wage have cost each UK pub about £14,000 on average, according to the latest figures.

The impact of rises in national insurance contributions, the national minimum wage, business rates for some companies and packaging taxes have wiped out the equivalent of 12 days of pubs’ turnover, the British Beer and Pub Association (BBPA) said.

Emma McClarkin, boss of the trade body, said the hit was “indefensible” and called for immediate action to help support the future of the sector.

Business

It has urged the Government to overhaul the current business rates system of property tax in order to help offset recent cost increases.

The Labour Government has said it plans to reform the current business rates system, and in March said it will publish an interim report on this during the summer.

However, in April’s budget, the Government cut a relief on the property tax – that came in following the Covid pandemic – from 75% to 40%, resulting in significantly higher bills for hospitality, retail and leisure businesses.

The BPPA has called on the Government to speed up reforms of the commercial property tax to alleviate pressure on pubs.

The organisation warned earlier this year that the average price of a pint of beer would surge past £5 for the first time because of the cost hikes hitting the sector.

It said the average cost of a pint in the UK was expected to rise by about 21p as a result as pubs are forced to pass some cost inflation onto customers.

‘Indefensible’

Ms McClarkin, chief executive of the BBPA, said: “Pubs are effectively having to run on empty for nearly a fortnight which is indefensible considering how vital they are to communities, livelihoods, and the economy.

“We support Labour’s ambitions to unlock the UK’s potential but, to do that, they must make practical, meaningful changes that support pubs and the jobs that rely on them.

“We are not asking for special treatment — we ask only for fairness.

“We want a modernised, business rates system that supports, not punishes, pubs; Government to mitigate employment cost rises; and a review of the nonsensical and unfair EPR (extended producer responsibility) system.”