Darling faces £242m tax black hole from pub closures

The government is facing a black hole of £242m in lost tax revenue due to pub closures since the last Budget - and the figure is set to get worse, according to a new study.

The British Beer & Pub Association (BBPA) study shows each pub, on average, pays a tax bill of £107,000 a year - 30 per cent of turnover.

And the pub sector's total annual tax bill runs to £6.1bn, the BBPA says.

The Chancellor's Budget black hole is growing at the rate of over £4 million a week due to pub closures alone, the group said, pointing out that since the last Budget more than 2,200 pubs have closed and more than 20,000 jobs lost.

David Long, interim 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."

Seventy per cent of the public 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 opposing further tax increases on beer, including 97 Labour MPs.