Pubs face ‘double whammy’ of tax hikes as hundreds call last orders for good

Around 50 pubs per month ‘vanished’ from England and Wales in the first half of the year as hospitality struggled with costs and tax rates.

The overall number of pubs in England and Wales, including those vacant and being offered to let, fell to 39,096 at the end of the first half of 2024, down by 305 compared with 39,401 at the end of 2023, according to data from Altus.

The North West lost the most pubs of any region, with 46 venues disappearing during the first six months of the year. A total of 472 pubs were lost, 25 of which were in London.

Pubs have been struggling with soaring costs since the pandemic, and while they currently receive a 75 per cent discount off their business rate bill up to a cash cap of £110,000, this is set to end at the end of March next year.

Business rates are also set to rise next April in line with September’s headline rate of inflation which, if unchanged from August, could also add an extra 2.2 per cent to bills next year.

Alex Probyn, President of Property Tax at Altus Group, warned of a “double whammy” of property tax rises and the end of the business rate relief for pubs next April.

She called on the Chancellor to use her Autumn Budget to act, adding that “the last thing pubs need is an average business rates hike of £12,160 next year through inflationary rises and the loss of the discount.”

Kate Nicholls, Chief Executive of UKHospitality, said: “While inflation has now stabilised, hospitality businesses continue to struggle as costs continue to rise, particularly across food, drink, energy and wages.

 “The sector’s acute cost burden needs to urgently come down, if hospitality is to fulfil its ambition to deliver investment and growth into the economy.

 “That would avoid the quadrupling of business rates bills when reliefs end in April, likely forcing businesses to raise prices to meet that rise.”

The news comes amid warnings from the wider hospitality industry over the risk of “serious economic harm” from a potential beer garden smoking ban, and an industry-wide urge to cut the beer duty by five per cent.