The leaders of Greene King, Fuller’s and JW Wetherspoon have warned Chancellor Rachel Reeves that a £1.7bn tax raid on businesses would trigger more closures, as they criticised the “ridiculously disproportionate” burden of business rates on the pub industry, The Telegraph has reported.
It follows reports that Reeves may use the next Autumn Budget to increase business rates for companies with bigger premises, in order to plug a £5bn hole in the public finances left by the government’s u-turns on benefits and the winter fuel allowance.
The Treasury has not decided the new rates, but business sources are concerned that Ms Reeves will set any surcharge on bigger properties at the maximum possible.
Greene King CEO Nick Mackenzie called on the government to remedy the “unfairness” in the business rates system by taxing companies based on profit, rather than property value.
A report from the British Beer & Pub Association (BBPA), last week, put the number of pub closures in 2025 at an estimated 378 – up from approximately 350 closures last year, with business rates given as a factor in those closures.
The industry has highlighted that the current business rates system means that business must still pay tax even when they are losing money.
The crucial valuation on which rates are based is “fair maintainable turnover”, a measure that looks at how much a pub should expect to sell in a year, without necessarily taking into account changes to costs.
“Pubs are going to be around for the long term, but we need to address the unfairness in the system to allow them to flourish,” Mackenzie said.
“It isn’t fair that the sector has 0.4% of the rateable property but pays 2.1% of the bills. The sector is a massive employer and incredibly important for local communities, so we just feel it is important to underline how beneficial it is to tax pubs fairly.”
Sir Tim Martin, chairman at JD Wetherspoon said the planned shake-up of business rates would rather disadvantage pubs at the time when they are subject to higher taxes on food sales than supermarkets.
While Simon Emeny, CEO, Fuller’s, said that if government failed to deliver on business rates, “not only will it increase pub closures… it really damages the viability of a sector that is absolutely critical to the UK economy”.
“The entire investability of the sector has been challenged by the actions of successive British governments over the last decade,” he told The Telegraph.
“Our sector carries a ridiculously disproportionate burden of the £25bn that’s currently raised from business rates. It’s long overdue that the Government found a fairer way of distributing this tax across the UK economy.”
Emma McClarkin, chief executive of the BBPA, added: “It has never been more urgent for government to overhaul the outdated and unfair business rates system as our sector, which makes huge economic contributions and has priceless cultural value, is one of the most highly taxed industries in the UK.”
The UK needed to “sit up and face the reality that unless they act now, they could oversee irreversible damage to our beloved pubs and brewers”.
