The trade body’s survey also found 83% of respondents will be reducing staff hours and shifts, 63% will be reducing staff numbers, through recruitment freezes or redundancies and 72% will reduce their spend with suppliers, many of them local.
The moves come as rises in the national minimum/living wage, employer national insurance contributions (NICs), the change in the NICs threshold and the reduction in business rates relief came into force at the beginning of April 2025.
The number one ask (70%) of BII members that would help the sector would be a “meaningful” reduction in VAT, which currently sits at 20%.
In response, the BII has called on the Government for support for pubs, not empty words, following the results of its latest survey.
The BII’s 13,000 members comprises mainly of people running independent pub businesses as free traders or tenants and lessees, who have consistently asked the Government for fair taxation to allow their businesses to survive, thrive and drive growth for the economy, and supporting flexible, local employment for all.
75% breaking even at best
BII members and the wider pub sector want the Government to reduce the “unfair burden” of tax they face.
Even before the latest tranche of tax increases came into force, almost 75% of survey respondents were either breaking even or losing money. This was despite strong trading for many BII members, with staffing, energy, inflationary costs and more, eroding their profitability.
BII CEO Steve Alton said: “Brilliant operators, the length and breadth of the UK, who provide connection, careers and community for all, are being pushed to the brink, despite running vital and viable businesses.
“Rachel Reeves and Angela Rayner’s comments over the weekend that ‘pubs, bars and restaurants are the beating heart of our economy and our communities’ must be matched with meaningful action that will genuinely improve the profitability for our pubs across the country.
“The drastic steps our pubs are having to take to keep their heads above water are a direct result of the already considerable pressures on profitability, before the recent tax rises – particularly in employment costs.
“Minimum wage has risen by 50% in the past five years – a cost borne entirely by operators and now they must pay more than 10% extra NICs just to keep the staff they have, as well as paying more than double for their business rates.
Stagnation or worse
“The impact of this cannot be underestimated. At a time where growth forecasts have been halved by the OBR (Office for Budget Responsibility), our pubs could be the key to kick-starting the economy but the Chancellor’s Autumn Budget has forced them into stagnation or worse.
“Alongside the implications for their businesses, the effect on pub operators themselves is stark, with 77% of operators saying their mental health is less than good, and over half of those rated their health as poor.
“We stand to see a real problem in our country if we lose more pubs. Government needs to understand the negative impact it will have on mental health and welfare services, let alone the economy and employment. So many people rely on pubs in their communities as safe spaces for community groups, families, friends, the vulnerable and the lonely.
“It is simply unfair to continue to place the burden of tax collection onto ‘Our Pubs’ and it will destroy our high streets and community spaces if action isn’t taken.”
The BII is running its Our Pub campaign that calls on team members, customers and suppliers of pubs to contact their MPs to share why they love their pubs and why they deserve fair treatment and the opportunity to thrive at the heart of their communities.