The tax burden on pubs is significant, not only does excise duty impact them, but our sector is also subjected to high business rates. The BBPA is leading the campaign to reduce the business rates burden on our pubs.
Pubs pay 2.8 per cent of all UK business rates, but only generate 0.5 per cent of rateable turnover. This amounts to an overpayment of £500 million.
On average a single pub pays some £140,000 per year in tax to the Treasury, around 34p in each pound of turnover in a pub goes to the taxman. Pubs play a crucial role in local communities, in many cases providing vital local services such as libraries and local shops. They are the heart of the social life for tens of millions of Britons and an important part of the fabric of our society.
An urgent review of the business rates system is badly needed, as well as continued short term financial help for pubs who shoulder a disproportionate burden. We were pleased the Government heeded our warning with a decision in 2017 to give a pub-specific rate relief of £1,000 per pub. Although this pub-specific support was subsequently removed, in the 2018 Budget it was replaced with a one third reduction in the rates bill of pubs with a rateable value of less than £51,000. This reduction is worth up to £8,000 for qualifying pubs.
Ongoing monitoring of the impact of the burden of red tape on pubs is critical. As things stand, by the end of the current business rates revaluation period the bill for pubs will have increased by a further 17%, or £2,600 per pub. For many, this will be too much to absorb on top of rising regulatory costs.
the benefit to the Scottish economy from beer and pub sector.