However, it has taken aim at Westminster over a “lack of understanding” in the previous two Budgets that “has caused incredible frustration, anger and worry” in the sector.
The trade body said while the details of the Government’s U-turn on business rates for pubs yet to be decided, the scale of the potential positive impact also remains to be seen.
It added pubs are already struggling with huge challenges around increased overheads, unfair taxation and the direct impact of the 2024 Budget as well as ongoing Covid debts.
Still reeling
BII CEO Steve Alton said: “Even before the Chancellor’s Budget in October 2025, our members are still reeling from the impact from the 2024 Budget, with significantly increased employment costs in terms of national insurance contributions and national minimum wage, business rates bills more than doubled, and high energy and food and drink costs.
“Despite the clear and consistent evidence that the BII and all other sector bodies presented to Government of this devastating impact from the first Budget, with only one in three pubs being profitable before the 2025 Budget announcements, and over 100,000 jobs lost in our sector, at her second Budget, the Chancellor chose to increase business rates and remove the sector specific relief, as well as further increasing the cost of employment.”
Alton added the Government move to provide specific relief for pubs on business rates is welcome as a starting point but pointed to a need for a reduction in the overall unfair tax burden its members have been facing, in order to safeguard the future of pubs, high streets and communities across the whole of the UK.
Only one in 10 to be profitable
“When the business rates and minimum wage increases were announced in November, the impact meant only one in 10 businesses would be profitable from April 2026 if they didn’t reduce their teams and services further, risking local employment and vital community spaces across the whole of the UK,” he stated.
“The lack of understanding from the Government, and specifically the Treasury, about the incredible pressure pubs have been under, with huge challenges they have faced since the pandemic, has caused incredible frustration, anger and worry for our members.
“Without urgent action to reduce the unfair and unsustainable tax burden pubs are facing, we will see significant closures in every community.”
