The British Beer and Pub Association (BBPA) has responded to the All-party Parliamentary Beer Group (APPBG) Business Rates Inquiry, calling for long overdue reform that reduces the disproportionate burden paid by pubs and brewers.
The brewing and pub industry in the UK makes a major contribution to the local and national economy. The sector generates £23 billion of economic value and supports 900,000 jobs, and 85% of pubs in the UK are run as SMEs.
However, the sector has also long suffered from over-taxation on business rates. Pubs pay more in business, per pound of turnover, than any other business sector. The business rates bill for the sector accounts for 2.5% of total business rates paid despite only representing 0.5% of total rateable turnover, an overpayment of £570 million.
The submission by the BBPA highlights these statistics and states that as one of the highest taxed sectors per pound of turnover, they do not believe the current system is fit for purpose, nor does it reflect a fair and equitable model for taxing business.
Within the response the BBPA makes numerous recommendations to tackle the unfair system, including:
- Introducing an Online Sales Tax explicitly used to reduce the burden of rates from physical properties.
- The creation of a permanent relief or unique property-based multiplier that is exempt from current Subsidy Control limits.
Emma McClarkin, Chief Executive of the British Beer and Pub Association said:
“It is clear the current business rates system places disproportionate burden on pubs and brewers which is stifling their recovery and ability to return to sustainable growth. Reform is needed to create a system which accounts for how the economy functions in the modern day.
“Pubs and brewers are at the heart of communities fostering social cohesion as we reconnect and recover from the pandemic. With the required support our sector can deliver jobs and additional economic value in every part of the UK, supporting levelling up and the regeneration of high streets and town and city centres up and down the country.