The Treasury is facing a black hole of £242m in lost tax revenue due to pub closures since the last Budget, according figures released today by the British Beer & Pub Association (BBPA).
The analysis of official government statistics shows that each pub, on average, pays a tax bill of £107,000 a year – 30% of turnover – and that the pub sector’s total annual tax bill runs to £6.1b
With the UK’s pubs now closing at the record rate of 39 a week, the chancellor’s Budget black hole is growing at the rate of over £4m a week due to pub closures alone, the BBPA warned.
Since the last Budget in March 2008, more than 2,200 pubs have closed and over 20,000 jobs have been lost, the trade group said.
As Alastair Darling sits down this weekend to finalise his Budget calculations, the BBPA believe this latest evidence “strongly supports” the case for him to abandon the beer tax escalator he announced in the last Budget and introduce a beer tax freeze.
David Long, chief executive of the BBPA said: “If the chancellor is trying to maximise tax revenues at this particular time then he will shoot himself in the foot by putting up beer taxes.
“These figures show that pub closures don’t just mean lost businesses, lost jobs and a loss to the local communities they serve. They are also a loss for the tax man.”
The release of the figures is the latest in a series of announcements the BBPA has made in recent weeks in an effort to persuade the chancellor to scrap plans to raise beer tax in Wednesday’s Budget.
By Daniel Thomas
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