Today’s VAT increase will push the average price of a pint of beer above £3, lead to more than 8,000 job losses in the UK pub sector and hit small businesses in general disproportionately hard. An analysis of the impact of the 2.5% increase in VAT to a rate of 20% by Oxford Economics suggests the increase alone will lead to 8,800 job losses in the pub and brewing sector. With the government remaining committed to duty increases in March via the “beer escalator”, further increases in taxation this year are forecast to cost the Treasury £40m in reduced tax revenues, and lead to another 10,000 job losses. The British Beer & Pub Association (BBPA) has called on the government to introduce a lower rate of VAT for hospitality businesses, mirroring the approach used in Europe. BBPA chief executive, Brigid Simmonds, said: “Today’s VAT rise is anther tax blow for the industry. The Treasury is piling tax on top of tax. The 26% rise in beer duty in the past two years will now have an even higher VAT rate charged on top of it. The Treasury needs to think again when it comes to plans for further beer tax hikes in March. “The Government has recognized that tax increases harm pubs, and wants policies that don’t damage the sector. Now is the time to translate this wish into action, with policies that keep pubs open, and create jobs and wealth in the UK economy.” A separate survey by small business body the Forum of Private Businesses (FPB) found that 70% of its members, which include restaurants, bars and hotels, expect today’s rise in VAT to hurt them. The FPB has called on the government to increase the threshold that VAT is charged at to help smaller businesses compete and drive economic growth.