Seventy-five per cent of publicans stand ready to invest if taxes are reduced — but two in five expect to close if the tax burden rises yet again.
That’s the takeaway from the latest survey by the British Institute of Innkeepers (BII). Despite strong summer trading, supported by great weather and major events, only one in three pubs made a profit, with 54% reporting lower profits.
The full year for January to August shows an even worse position, with only one in four making a profit.
The biggest pressures are staff costs, energy, and the inability to pass further cost increases on to customers already facing stretched household budgets.
Around 40p from every £1 spent in a pub goes to the Treasury through taxation. The BII says this burden is unfair, unsustainable. and is significantly limiting the potential of pubs to invest, employ more people, and support their local economies.
The BII Member Survey shows what a fairer tax deal, with a priority on 10% VAT on all pub sales, could unlock:
- 75% would invest in their pubs;
- 62% would increase staff hours, supporting additional skilled jobs; and
- 50% would spend more with local suppliers.
“Our latest member survey sends government a very clear message,” said Steve Alton, chief executive of the BII. “Pubs have enormous potential to deliver exactly what our economy needs — investment, employment, and growth in every community. A fair tax deal, including 10% VAT on all pub sales, is vital to make this happen.
“But when around 40p from every £1 spent in a pub goes to the Treasury, the tax burden is unfair and unsustainable. It is choking the potential of good long-standing pub businesses to invest and grow.
“Maintaining or increasing the current unfair cumulative tax burden again could mean thousands of pubs lost from communities across the UK. Back our pubs and they will deliver in every postcode. Tax them harder and we will lose thousands.”
