Reduce tax burden on pubs to boost recovery, think-tank urges

By Emily Hawkins contact

- Last updated on GMT

Sector recovery: a think-tank has concluded pubs need a permanent VAT reduction and beer duty cut to thrive post-lockdown (images: Martin Parratt, Getty Images)
Sector recovery: a think-tank has concluded pubs need a permanent VAT reduction and beer duty cut to thrive post-lockdown (images: Martin Parratt, Getty Images)

Related tags: lockdown, Coronavirus, Legislation, Health and safety, Bbpa, Tax, Business rates, Beer duty

The Government should support the pub sector’s recovery by slashing taxes and providing top-up grant support, a new report has claimed.

Think-tank Localis concluded top-up grants should be used to help pubs in ‘left-behind places’ such as coastal towns or former industrial communities in 2022. 

In the report, titled ‘The Power of Pubs – protecting social infrastructure and laying the groundwork for levelling up’​, the think-tank makes several recommendations on tax.

The Government should work with the sector on a long-term solution to business rates reform, beyond the end of the rates holiday, it recommended.

There should also be a review into the impact of the VAT cut for hospitality with a view to making this a permanent reduction for all food and drink sales in pubs. 

Policymakers should also commit to a further reduction in beer duty, to help pubs and breweries in the long term and help to lower the national debt.

At-risk areas

Further targeted grants should be considered to boost local economies, particularly in deprived areas, Localis concluded.

The report stated: "In particularly at-risk areas, such as those ‘left-behind places’ like coastal towns or recipients of the Shared Prosperity Fund, top-up grants should be issued to the hospitality sector in 2022 to shore-up resilience and help raise the baseline of the industry in place.

"Current levels of support are inadequate to protect local economies from the shock of a sudden downturn in the pub sector."

There should also be a diversification grant to pubs that wish to retain or expand community-orientated services they provided during lockdown.

What's more, local authorities should aid the sector's recovery by issuing licence fee refunds for the six months to June 2021, through business support grants. This should be covered by the Treasury, the report recommended. 

Inconsistent messaging 

Localis said the hospitality sector had been "devastated" to an extent that was "far beyond what was necessary in response to a national emergency."

Businesses had been damaged by "inconsistent messaging and decision making," according to the think-tank.

Localis chief executive, Jonathan Werran, said: “The case for treating Britain’s pubs with fair consideration in exiting lockdown measures is, at core, as simple as it is heartfelt. Where there’s a pub, there’s a community.

“As one of the biggest contributors to the UK economy, the sector has a vital role to play in the recovery and levelling up journey of the country as well as in maintaining community cohesion and social resilience well beyond the pandemic.”

Related topics: Legislation

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