UK Pubs Pitch Tax Discount to Treasury Amid Budget Concerns

(Bloomberg) — Business groups representing bars and hotels in the United Kingdom held talks with Treasury officials on Tuesday as they pressed for further tax cuts to ease the burden of changes that Chancellor Rachel Reeves made to her budget in November.

According to Emma McClarkin, Chief Executive of the British Beer and Pub Association, lobbyists pressed for pub-only business rates to be reduced in a meeting with Chancellor of the Exchequer Dan Tomlinson. “We hope the government understands the need for a swift and meaningful solution to secure the future of our pubs,” he said in a statement.

Reeves touted the “lowest tax rates since 1991” for more than 750,000 retail, hospitality and leisure properties within his budget, after dropping the so-called multiplier level used to calculate business rates. But the end of pandemic relief and the revaluation of commercial properties means bills for a typical hospitality business will rise.

Hospitality groups have warned the net result could be crucial for some businesses, pushing the Treasury to unwind or ease the proposals. Meanwhile, at grassroots level, some pub owners have launched a campaign to ban MPs from the ruling Labor Party from entering their premises in protest against rising tax bills.

Lobby group UKHospitality predicts that if no changes are made, the typical pub will see a 76% increase in business rates by 2028/29 and the average hotel bill will rise by 115%. He advocates for a higher tax cut for the entire industry.

The government has defended its measures so far, pointing to a three-year transitional discount where the cap rises to 15% per year. On Monday Prime Minister Keir Starmer said: “For pubs and others, I accept that the revaluation means they will struggle” and that there will be talks about further support.

Starmer’s spokesman Tom Wells told reporters on Tuesday that authorities were also looking into cutting red tape as well as changes to licensing rules previously announced in November.

The Treasury said in a statement that without the support announced in the budget, pubs would face a 45% increase in total bills next year, instead facing an increase of just 4%. “We’re protecting bars, restaurants and cafes,” he said, also pointing to efforts to “streamline licensing to help more venues offer drinks on the sidewalk and host one-off events,” as well as an alcohol tax cut on draft beer and a cap on corporate taxes.

–With help from Joe Mayes.

(Treasury comment added to the last paragraph.)

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