Chancellor Rachel Reeves used her Budget to announce measures to ease the burden on struggling pubs, but the industry warns it won’t be enough given a “catastrophic” tax rise that is looming
The government has been warned a leap in costs for pubs could spell the “death knell” for many.
Critics say landlords are facing a “catastrophic” rise in their business rates bills next April, despite Rachel Reeves pledging to help the sector in the Budget. In it, the Chancellor confirmed changes to the way property tax are calculated in England which would result in “permanently lower” rates for more than 750,000 retail, hospitality and leisure properties.
But those in the pubs sector claim, at the same time, they face the withdrawal of Covid-era support and a sharp increase in the starting point at which the rates bill is set.
At the heart of the issue is how the “rateable value” of pubs is calculated, which includes an assessment of how much it would cost to rent the property as well as its potential turnover. The next revaluation next effect in 2026 is based on properties’ values in 2024 as assessed by the Valuation Office Agency.
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The Campaign for Pubs has written to the Chancellor and Business Secretary Peter Kyle urging them to scrap a revaluation process, for fear it will “sound the death knell of our world famous culture”.
It says “distraught” publicans have to message each other with comparisons of the increases they face, with some pubs facing rates hikes that double or treble their annual bill, which “immediately put them out of business”. It warned the jump could force thousands more pubs to close.
Dawn Hopkins, vice-chair of the Campaign for Pubs, and a licensee in Norwich, said: “The one thing in the Budget that was sold as good news for pubs, has turned out to be the worst news of all for the vast majority of them. The appalling reality is that the majority of pubs will see huge hikes in business rates.”
Separate analysis from trade body the British Beer and Pub Association estimates that higher bills will cost the industry an extra £150million. The BBPA calculated that bills will rise by £3,867 for the average small pub from next year, and by £11,085 for the average medium-sized pub. Emma McClarkin, chief executive of the BBPA, said pubs across the country “are anxiously doing the sums and many will now see their bills will dramatically go up, not down, despite the impression the Budget gave”.
The Mirror has been highlighting the plight of the sector through its Your Pub Needs You campaign, including the need to provide support for communities trying to save their local.
The Treasury insists the tax rate for small retail, hospitality and leisure businesses will be the lowest since 1990/91, and for all others since 2010/11. “This is a big deal – it is a permanent tax cut worth nearly £900million per year,” it said. “Overall, we’re spending £4.3billion of taxpayer money on a support package. This includes protection for businesses who would otherwise have seen sharp increases in bills next year.”
