As we move towards the Budget on 16th March, the BBPA team is very focused on our campaign for a cut in beer duty in the Budget, and my colleague Andy Tighe, has written about how much this benefits pubs.
Yet with such a large tax burden facing pubs, there are also many other reasons why the sector really needs another duty cut.

At the end of last year, the BBPA commissioned Oxford Economics to look at the total and average tax contribution of a British Pub. It concluded that over a third of pub costs go in tax, or on average £140,000 for every pub.

This makes for a grand total of £7.3 billion, as the pub sector total tax burden. In comparison with other sectors, the pub’s tax burden was the 26th largest, despite being only the 41st largest in terms of turnover.

Despite this big burden, we are facing a perfect storm, in terms of new business costs. We estimate that the introduction of the National Living Wage will cost the pub sector £35 million in 2016/17. We want to pay our staff more but it will be a challenge, particularly for small businesses, to achieve the productivity increases to cover these costs.

The Apprenticeship Levy will cost companies several million pounds in additional costs. New auto enrolment pensions will this year result in £34 million of new costs, with the abolition of retail relief adding a further £46 million.

The Apprenticeship Levy will cost companies several million pounds in additional costs. New auto enrolment pensions will this year result in £34 million of new costs, with the abolition of retail relief adding a further £46 million. The latter is a big financial blow, adding up to £1,500 to the bill of a community pub.

Overall, the BBPA estimates that new cost and tax pressures are the equivalent of a 3.4 per cent increase in beer duty, or an additional 1.6p per pint – enough reason on its own, to justify a beer duty cut in the Budget.

So, what are we asking for to help pubs deal with these new challenges? Alongside a penny off beer duty, we are asking for a review of the stakes and prizes for Category C gaming machines. We are asking the Government to look again at VAT for the hospitality sector. We are looking to the review of Business Rates to bring more companies into the scope of paying this tax and the reinstatement of Retail Relief, or reducing the burden on pubs which after all cannot be ‘virtual’! Whilst we support the abolition of the Carbon Reduction Commitment and simplification, we are concerned that the Climate Change Levy should not place too high a tax on small businesses like pubs.

With many pressures ahead, at the end of the day, we believe that a further cut for beer duty in the Budget 2016 is the most targeted and effective way to support the Great British pub but will continue to push Government for greater support on all of these issues.