Hospitality Sector Calls for Tax Reform Mount as Prime Minister Admits Pubs Will Struggle
Pub operators are stepping up calls urging fundamental reform of the tax system after the Prime Minister indicated potential support measures for hospitality businesses affected by business rates increases.
The Prime Minister discussed ongoing conversations with the sector during a radio interview this week, suggesting possibilities including licensing adjustments (longer hours) whilst recognising that certain establishments would face higher costs under the recent revaluation.
Industry leaders have emphasised that the conversation should focus on systemic change rather than support packages, highlighting the substantial tax contributions already made by the pub sector.
In a TV radio interview Michelin star chef Tom Kerridge said his business rates are going up by over 100%, and said that reports of a 15% rise in business rates was higher for him and others. “I don’t know where you got 15% from mine is about 115%, I’ve got four pubs, and all of them are going up pretty much over 100%,” he said.”
Asked whether the transitional relief from the Treasury would help as the new rates come into effect, he added: “The relief comes in, that’s to help you get to that end number, it’s just softening the blow, it’s still killing you off in 2-3 years time, the packages that are helpful are only helpful for a short amount of time.
JD Wetherspoon’s founder and chairman Tim Martin challenged the framing of government assistance. He noted that his company, along with its employees and customers, contributes approximately £1 billion annually in taxation, representing roughly 40% of turnover. Martin stressed the need for parity with supermarkets regarding VAT and business rates, rather than additional support measures.
Admiral Taverns’ chief executive Chris Jowsey warned of significant financial pressure on community establishments, revealing that over half of the company’s portfolio faces substantial rate increases. He indicated some licensees were experiencing rises exceeding 280%, describing the current framework as counterproductive to growth and investment.
Operators involved in recent protest actions have clarified their position on potential government responses. Dorset publican Andy Lennox stated the sector requires substantial VAT reduction aligned with European levels and enhanced rates relief, dismissing licensing changes as insufficient.
Dorset operator Andy Lennox said the industry had “no interest in licensing concessions”, arguing that the only meaningful intervention would be a VAT cut and deeper rates relief.
“The only support that is acceptable is a VAT cut to 13% in line with Europe,” he said, adding that the planned rates discount for April should be significantly higher than currently proposed.”
Writing in today’s Daily Telegraph Lennox said that he is terrified what is coming post-Christmas, he said: “We only have what we made in December which barely sees us through to February or March after which we will be running on fumes
Adding that his tax bill is set to double over the next two years.
Lennox is at the forefront of a campaign banning MP’s from local pubs commenting: “They have told us to lift the ban and be quiet and if we do we may get a concession but is showing no signs of backing down, he added we’re moving closer to a full on hospitality wide industrial action the time for talking is now over”
Taking to social media Conservative MP Matt Vickers said why do labour hate pubs? They are being battered, I spoke to one landlord who will see his business rates triple. Now it revealed to Rachel Reeves as blocking new financial support for pubs. She lives on another planet without any idea of the chaos she has created”
Sector representatives maintain that without meaningful reduction in cost pressures, the disconnect between policy announcements and business realities will persist for establishments already managing elevated operational expenses.