Drop the Tap Tax in the Budget to Give the economy a £300 million boost

Getting the Chancellor to Drop the Tap Tax in the Budget could create over 7,600 extra jobs in the pub and beer sector and add more than £300 million to the economy.

That’s according to new research by the Centre for Economic and Business Research (Cebr) published today (9 September) which details the benefits of lower tax on pub beer.

The research findings supports the Drop the Tap Tax campaign which was launched last week, calling on the Chancellor to take action in his October Budget.

Pubs and breweries are one of the most highly taxed sectors with breweries paying 40% of their turnover in tax. The Chancellor can help rebalance this through targeted tax changes on beer that’s sold in pubs via handpulls and keg taps through a mechanism called Draught Relief. This is currently set at a 13.9% rate.

The Cebr research shows that expanding Draught Relief to 50% could see 56 million extra pints being poured in community pubs, 7,663 extra jobs and contribute £310 million to the economy. It would also see nearly £120 million in additional taxation going to the tax man, excluding changes in tax collected from excise duty.

Even a more modest increase to 30% could result in 3,403 new jobs and 25 million additional pints being served, boosting the economy by £137 million. This would see Treasury coffers receive £53 million in extra taxes, excluding changes from excise duty.

“Lower tax on pub beer improves the economy, creates jobs and means more pub pints are being poured”, said Andy Slee, Chief Executive of the Society of Independent Brewers and Associates (SIBA). “Pubs and breweries are a cherished part of our communities and a Drop in the Tap Tax could give them a huge boost in the Chancellor’s Budget.”

The Drop the Tap Tax campaign calls for the Chancellor to reduce tax on pub beer in the Budget on Wednesday 28 October. The campaign is being organised by the Society of Independent Brewers and Associates (SIBA) and the petition can be found at www.droptaptax.com. Publicans, brewers and hospitality venues can download posters and share the petition on social media using the hashtag #DropTapTax.