Chancellor counts cost of £242 million tax loss from pub closures

18th April 2009, 12:11am

The Treasury is facing a black hole of £242 million in lost tax revenue due to pub closures since the last Budget, according to new figures released today by the British Beer & Pub Association (BBPA).

The analysis shows that each pub, on average, pays a tax bill of £107,000 a year – 30 per cent of turnover.

The pub sector's total annual tax bill runs to £6.1 billion. With Britain's pubs now closing at the record rate of 39 a week, the Chancellor's Budget black hole is growing at the rate of over £4 million a week due to pub closures alone.

Since the last Budget in March 2008, more than 2,200 pubs have closed and over 20,000 jobs have been lost.

As the Chancellor sits down this weekend to finalise his Budget calculations, the BBPA believe this latest evidence strongly supports the case for him to abandon the beer tax escalator he announced in the last Budget and introduce a beer tax freeze.

David Long, chief executive of the BBPA said: "If the Chancellor is trying to maximize tax revenues at this particular time then he will shoot himself in the foot by putting up beer taxes. These figures show that pub closures don't just mean lost businesses, lost jobs and a loss to the local communities they serve. They are also a loss for the tax man.

"Freezing beer duty in the Budget will help give pubs some of the breathing space they need to fight their way through this recession. If the Chancellor increases beer taxes as he said he planned to do last March, then he will condemn more pubs to close, put more people out of work and lose even more tax revenue."

The BBPA highlight the fact that freezing beer duty would also have widespread public and political support.

Seventy per cent of the British people are opposed to an increase in beer tax, and 59 per cent of MPs also oppose any increase, including 41 per cent of Labour MPs.

More than 200 MPs have signed a Commons motion (EDM 10) opposing further tax increases on beer, including 97 Labour MPs.

Related Articles:

• 01 Jun 2009 - New figures show UK near top of EU beer tax league
• 14 May 2009 - Unite supports pub beer supply investigation
• 13 May 2009 - MPs call for inquiry into 'beer tie' activity
• 28 Apr 2009 - Beer sales continue to slide
• 22 Apr 2009 - Industry react angrily to the Budget
• 20 Apr 2009 - 90% of public want taxes reduced or frozen in Budget

Click here to submit a comment!

Have your say!

To comment on this article, simply enter your name and email and send us your views. Please note that your comment will appear publicly below this article once it has been processed. For enquiries please email info@eatoutmagazine.co.uk.