Pubs need VAT reduction to avoid further closures

By Rebecca Weller

- Last updated on GMT

Poll results: VAT would be most beneficial to pubs (Credit: Getty/stocknshares)
Poll results: VAT would be most beneficial to pubs (Credit: Getty/stocknshares)

Related tags Government Legislation Finance

More than two fifths of operators stated a VAT reduction would help the sector avoid further closures.

A snap poll conducted by The Morning Advertiser​ revealed of the 143 respondents, 44% would find a reduction to VAT most beneficial for their pub.

Barons managing director Clive Price said a VAT “correction” would be “great” and should have “happened a long time ago”.

He continued: “It would put us more in line with Europe and also mean the Government doesn’t have to keep propping us up.

“The industry doesn't want to be propped up all the time, but it does need a framework that allows us to carry on and trade without intervention.

“I've been in the business for 23 years now and some of the stuff we're going through at the moment is absolutely nuts; it's off the scale.”

Riding the storm 

Additionally, energy support extension took an 8% share of the poll while 3% of participants selected voted for rates reformation and 2% for cuts to alcohol duty.

Price continued: “Energy is clearly a massive issue and a real worry for everybody; it could finish good businesses through no fault of their own.

“At Barons, we're riding the storm, but we are having to put our prices up more than is comfortable.

"Where you used to put 25p or 50p on a main course dish or 5p to 10p on a pint, suddenly those numbers look very different; it's a culture shock for operators and customers.

“We have to re-educate ourselves and our customers on what the right selling price is, but the basic facts are you cannot keep charging [these amounts] when your cost of doing business has gone up by [like it has]."

Price added improving freedom of movement to “allow more workers to join to the industry” would also help alleviate pressures on the sector, but more important was an “urgent review” to the business rates system.

Clarity and consistency 

He continued: “Business rates definitely need an urgent review, it’s an awful system that needs looking at root and branch reform.

“Things have fundamentally changed in how all the costs stack up in hospitality businesses and the Government can’t expect to keep taking the same, otherwise there will be a lot of business failures; you can't pour from an empty cup.”

This comes as data from real estate intelligence firm Altus Group earlier this month showed more than 150 firms had already closed for good so far this year.

In addition, the second most popular option in The MA’s​ poll with 43% of the votes, was a combination of all of the above options.

Fuller’s tenanted director Iain Rippon added “clarity and consistency” were “really important” and an overhaul of the business rates system was “long overdue”.

He continued: “Most immediately [we need the Government] to put pressure on Ofgem to help pubs that were forced into onerous contracts, which will force their closure, to help them switch onto more realistic contracts based on current rates. We need to know, as well as we can, what the future looks like.”

Related topics Legislation

Related news

Show more