Steve Alton, CEO of the British Institute of Innkeeping (BII), has today written to the Chancellor following the stark results of their recent survey.
Steve Alton commented: “With 83% being forced to reduce team shifts and 63% reducing their head counts through recruitment freezes or redundancies, working people stand to see a reduction in the money in their pockets, contrary to Government’s intentions.
“Our members, despite positive trading for many, are having to take drastic action to keep their heads above water. The only one to benefit from these tax rises is the Treasury. Not hardworking team members and certainly not the licensees who despite the incredible pressures they are facing serve their communities with passion and commitment.
“Government needs to understand the dire consequences for our economy, our unemployment rates and our mental health and welfare services if they do not take notice of the reality for pubs across the UK, who collect billions in tax every year, and provide safe, accessible spaces for all to connect and celebrate.”
The Rt Hon Rachel Reeves MP Chancellor of the Exchequer HM Treasury 1 Horse Guards Road London SW1A 2HQ 9th April 2025
April tax rises resulting in lost staff hours, jobs, investment and growth in pubs in every community
Dear Chancellor,
I am writing to you urge you to reconsider the additional tax rises that you have now implemented on independent pubs across the UK. Our 13,000 members, independently operating pubs across the UK, were already struggling to be profitable ahead of these tax rises, with the impact of ongoing high energy costs, embedded inflation in food & drink costs, and broader business costs all rising.
The significant tax rises in employment costs and reduced business rate relief has affected the vast majority of independently run pubs, even taking into account the increased NICs allowance from £5,000 to £10,500, forcing them to make tough choices;
• 83% will now be reducing staff hours and shifts
• 63% will be reducing staff numbers, through recruitment freezes or redundancies
• 72% will reduce their spend with suppliers, many of them local
Even before the April tax rises almost 75% of survey respondents were either breaking even, or losing money. These are not big corporates; these are small local businesses run by individuals that are passionate about their role in their community and being a vital local employer.
The drastic actions that our members are now having to take to keep their heads above water are taking their toll. In addition to the implications for their businesses, the effect on pub operators themselves is stark, with 77% of operators saying their mental health is less than good, and over half of those rated their health as poor.
Our members are vital workers within their communities, but their situation is not sustainable with many working beyond reasonable hours as they cannot employ the team they need, the stresses of managing cashflow to try to pay their staff and bills and the uncertainty for them, their families and their vital small businesses.
You recently again recognised pubs to be at the beating heart of their communities.
Without meaningful support from you they will simply not be able to continue to play that role. Essential investment in their modern pub businesses is grinding to a halt with huge impacts to local suppliers, existing pub staff are having their hours cut and jobs are being lost. Your additional taxation is simply squeezing pubs too far, they are not the broad shoulders on which to recover the nations finances.
However, with fair taxation they can once again be at the heart of growth in the economy. These businesses can grow, with many already hugely diverse in their offer attracting new customers to these essential community hubs. They can grow their teams and provide many a stepping on point in employment with flexible and skilled jobs.
Employment in pubs is key to social mobility with a third of our workforce being under 25 years old in addition to many working parents needing essential part time jobs to fit around their other obligations. We also provide professional development pathways at all levels irrespective of prior academic achievement. We can be at the heart of today’s economy in getting people working.
I am asking you to simply allow pubs to pay fair taxation, with £1 of every £3 spent in pubs going to the Treasury this is just unsustainable.
I am asking for your support in the following areas:
– Reverse and postpone the damaging NICs changes for pubs to support full time and part time jobs
– Reset the Business Rates discount to 75% until meaningful business rate reform is in place
– Accelerate growth through reducing overall taxation for pubs through a lower VAT rate
These changes will halt the decline of growth, investment & employment in pubs and kick start their growth in every community. Sales and employment will grow once again, driving positive receipts for the Treasury. We will also prevent further unnecessary failure of pub businesses across the UK protecting pub workers, supporting local economies in which pubs are foundational, and ensure we can continue to have access to these safe, accessible local hubs which create vital connections in every community.
You have a huge opportunity to save and invest in the great British pub and as always, we stand ready to work with your team to make this happen.
Yours sincerely, Steve Alton Chief Executive Officer British Institute of Innkeeping (BII)
