UK pub tax burden slammed by study

British pubs carry one of the heaviest tax burdens in the country, with each one paying an average of £140,000 in tax every year, according to a new report.

In terms of per pound of turnover, pubs pay the second highest business rates bill among the 67 sectors studied (Photo: Wiki)

The full report shows that the industry’s yearly tax bill amounts to £7.3 billion, representing £0.34 in every £1 of turnover. In terms of the total tax bill, “costs were £800m larger than the ‘gambling and betting’ sector,” the report says.

“The pub industry was found to have a tax burden which was larger than a large proportion of the sectors studied in this report,” researchers from Oxford Economics, on behalf of the British Beer and Pub Associated, concluded.

Along with beer duty, the bill for business rates has been cited as the main contributor to the large tax burden. 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, the study said.

It argues that pubs should only be paying £100 million per year in business rates – six times less than they currently do.

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 George Osborne calling for a range of immediate reliefs on business rates in this week’s Autumn Statement.

Commenting on the new report, Brigid Simmonds, BBPA chief executive, said: “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.”