Pubs carry huge tax burden from business rates, report shows

23 November 2015 by
Pubs carry huge tax burden from business rates, report shows

Pubs have one of the heaviest tax burdens in the UK economy, according to the latest research.

A report from Oxford Economics for the British Beer & Pub Association (BBPA) published today (23 November) shows the industry's total tax bill amounts to £7.3b.

This is equivalent to £140,000 for every pub, which represents 34 pence in every pound of turnover. VAT, excise duty and business rates were found to be the main burdens.

Oxford Economics concluded that the pub industry was found to have a tax burden that was larger than many of the sectors studied in the report.

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

As pubs have struggled, this has led to them being overburdened, according to the BBPA.

The association estimates pubs have been paying six times (£600m) more than they should be paying (£100m) per year, if their bills were in line with sales.

The Oxford Economics report found 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.

Brigid Simmonds, chief executive of the BBPA, 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."

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