It also reported that less than one in ten pubs expect to remain profitable by April 2026 without significant cuts.
The flash survey, carried out after last week’s Budget statement, highlights the cumulative impact of tax and cost increases introduced in October 2024 and reinforced in the latest fiscal measures.
Members attributed current pressures to rises in employer NICs, increases to the national minimum wage and national living wage, and a doubling of business rates bills as relief was reduced to 40%.
‘Huge rises’
Despite the Chancellor’s commitment to “permanently lower rates bills” through business rates reform, the BII said pubs instead face “huge rises” from April 2026. The Budget introduced a 5p discount on the standard multiplier, but this is outweighed by the removal of retail, hospitality and leisure relief and substantial increases in rateable values in the draft 2026 rating list.
The organisation warned that members now expect to absorb increases in the national minimum wage, up 8.5% to £10.85, and the national living wage, up 4.1% to £12.71, alongside higher alcohol duty and significantly increased rates liabilities. As a result, operators anticipate widespread cost cutting across the sector.
Survey findings:
- 90% expect to increase drinks prices
- 80% will cut staff hours
- 71% will increase food prices
- 45% will reduce opening hours
- 42% will make staff redundant
- 41% expect to reduce services such as food provision
BII chief executive Steve Alton said the Budget had “betrayed” pub operators and that further taxation risked forcing viable small businesses to close.
Pushed to the brink
“We have spent more than a year giving evidence to Government about the huge impact the 2024 Budget had on pubs, pushing them to the brink,” he said. “Our pubs are not failing businesses, but Government policy and over taxation is holding back their full potential.”
Alton said he had written to the Chancellor this week following “devastation” among members after both the Budget announcement and the release of revaluation figures for 2026.
He reiterated calls for a reduction in VAT in line with European competitors, full reform of the business rates system to address imbalances with the digital economy, and reversal of increases in employment taxation.
“Despite promises to give a break to businesses that operate in local communities, like pubs, the Budget has instead added thousands of pounds to the cost of running a pub,” Alton said.
Quoting the Prime Minister’s recent statement that pubs are “the beating heart of our communities”, Alton added: “This Budget has ripped the heart out of those communities.”
The BII urged publicans and customers to write to MPs through its ‘Our Pub’ campaign, calling for immediate intervention to prevent further closures.
