Small brewers pay 50x more in rates than global beer firms
This has been attributed to tax system inequality by the Society of Independent Brewers (SIBA), which is now calling on the Government to address the issue as part of its business rates review.
The organisation said that due to the way business rates are calculated for large brewery sites, rateable value is worked out in a different way than normal commercial venues.
Pay per pint
SIBA stated that for many larger breweries “often run by multinational companies, the contractor’s basis of valuation is used”.
The brewery body added that global beer firms have UK breweries producing almost a billion pints a year and pay just 0.0005p per pint in business rates to do so.
A small brewery, which would be a “fraction of the size” and producing about a million pints a year pays 0.027p per pint.
Tax burden
SIBA chief executive James Calder said: “It is hugely important the Government recognises the pressure independent brewers are under and address the inherent unfairness in business rates between global and local breweries.
"It is unfair to expect small brewers to once again carry the tax burden for global brands, particularly as they are some of the worst hit by coronavirus and there is the potential for separate tax rises around the corner too.
“Small brewers are being attacked from all sides and it seems the Government are making no effort to support or protect them – receiving none of the Government’s hospitality industry support during Covid-19, about to see their tax bill rise, and paying higher business rates, than the world’s biggest brewers," he continued.
“It is grossly unfair for a small brewer to pay rates equivalent to 57 times of a global beer company. It means that small businesses are carrying the burden of taxation and struggle to compete against these global breweries that still dominate beer sales in the UK.
“We need to create a more level playing field so that small breweries are not penalised by the tax system. The Government should look at this differential as part of its fundamental review of business rates and consider whether a unit of comparison such as the level of beer produced could be used instead.”
