Pub bosses in joint call for ‘urgent’ tax reform
Pub bosses have called for urgent reform of the business rates system, arguing that the levy places unfair pressure on hospitality venues at a time of rising costs across the board.
Greene King boss Nick Mackenzie said that business rates should be “fundamentally reformed” so that the tax – which applies to all commercial venues – is based on a pub’s profit rather than its turnover.
Mackenzie said that reform was essential to “ensure the system is fair and fit for the future, rather than stuck in the past.”
“It has never been more urgent for Government to overhaul the outdated and unfair business rates system… our sector [is] one of the most highly taxed industries in the UK,” CEO of the British Beer and Pub Association (BBPA), Emma McClarkin, said.
Pubs contribute 2.8 per cent of the total business rates bill but account for just 0.5 per cent of total business turnover, leading to an overpayment of around £500m.
One pub a day is expected to close this year, partly due to the heavy pressure of business rates.
High wage taxes, supply chain costs and poor consumer spending have also hit local pubs – and nightlife more broadly – particularly hard.
“These real stories should make Government and policy makers sit up and face the reality that unless they act now, they could oversee irreversible damage to our beloved pubs and brewers,” McClarkin said.
In the short term, Greene King has argued for a specific, lower business rates multiplier for all pubs at the Autumn Budget this year, giving them a 20p discount on their current rate.
On average, a company will pay business rates equal to 50 per cent of their annual rent, although retail, leisure and hospitality companies are able to access relief of 40 per cent. This has fallen from 70 per cent during and after the pandemic.
Fuller’s, Young’s and McMullens unite against rates
Wetherspoon’s, Young’s and Mitchell & Butlers have all called for rates reform, saying that business rates penalise pubs in central locations and discourages Brits from running high street businesses.
The head of Fuller’s, Simon Emeny, has called the business rates system “archaic”, calling on the Government to “overhaul” the system.
“The Labour Party has a clearly stated objective to grow the economy and the hospitality sector can be an excellent engine to help deliver that growth,” Emeny said.
Labour has pledged to replace business rates with a “new system of business property taxation“, which “rebalances the burden and levels the playing field between our high streets and online giants”.
Executive director at Square UK, Samina Hussain-Letch, said that the “pressure to stay open is mounting daily”.
“Rising costs and business rates are hitting small pubs hard… these neighbourhood hubs are more than just business addresses; they’re cornerstones of their communities and vital to local economies,” Hussain-Letch said.
Outgoing McMullens boss Charles Brims has voiced similar sentiments, arguing that the Autumn budget last year brought about “a tax and cost burden without precedent in the 21st Century” with larger employers “particularly hard hit.”
“The hospitality sector, having borne the brunt of public health demands during the pandemic, is now bearing the brunt of the public finance demands,” McMullens said.