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Heavy pub tax burden unfair, new report finds

Published:  23 November, 2015

Britain's pubs bear one of the heaviest tax burdens in the UK, according to a new report published today.

Pubs have the second highest business rates bill across sectors, says the report from financial consultancy Oxford Economics on behalf of the British Beer & Pub Association.

That is nearly six times higher than justified, it claims.

The sector contributes 2.8 per cent of all UK receipts from this tax, but accounts for just 0.5 per cent of turnover.

That represents an overpayment of £500 million per year, the reports says.

Some 4p out of every pound of turnover goes towards business rates, twice the burden of the retail sector.

The current rate valuations are based on 2008 trading performance.

The total tax bill carried by the sector is £7.3 billion, or £140,000 for every pub and 34 per cent of turnover.

In 2013, the pub trade supported 768,000 jobs, paid £8.7 billion in wages and contributed some £17.1 billion to the economy.

It also raised £3.7 billion in VAT, £1.4 billion in income tax and national insurance, and £1 billion in corporation tax.

The BBPA, together with a range of other trade associations, wrote to the Chancellor last week calling for a range of immediate reliefs on business rates in this week's Autumn Statement.

Brigid Simmonds, BBPA chief executive, said: "This new report sets out the stark reality of the disproportionate tax burden bearing down on pubs.

"Without action to reduce this burden, more of our much loved community pubs will be under threat.

"The Chancellor has taken action on beer duty, and to relieve the burden of business rates on pubs in his previous two Autumn statements, but there is no doubt that more relief and reform is needed."