The UK's community pubs and independent breweries are facing an existential threat from recent changes to business rates, industry leaders have warned. In an open letter to Chancellor Rachel Reeves, the Society of Independent Brewers and Associates (SIBA) has pleaded for a rethink, stating the new tax calculations could determine whether local pubs survive or are forced to close their doors for good.
A Budget Promise Unravelling for Hospitality
In her budget last week, Chancellor Rachel Reeves announced a package designed to offer permanently lower tax rates for over 750,000 retail, hospitality and leisure properties. This was to be funded by higher rates on the UK's largest businesses, including major online tech firms like Amazon. The measures included £3.2bn in transitional relief and an expanded small business support scheme.
However, the hospitality sector argues the reality is starkly different. They contend that the support offered is insufficient to offset significant rises linked to the revaluation of their properties' rateable value. While major retailers expressed relief, pubs and brewers say they are facing a devastating financial blow.
The core issue lies in how a pub's rateable value is calculated. Unlike many retailers, whose value is falling due to poor high street trade, a pub's valuation is based on what a hypothetical 'efficient operator' could earn, not its actual income. With consumers cutting back on spending due to high bills and inflation, many pubs now face a sharp increase in this key metric next year.
The Staggering Cost to Pubs and Breweries
The figures presented by the independent brewers are alarming. They state that once revaluations are factored in and transitional relief ends, pubs will typically pay 76% more in business rates by 2029. In stark contrast, they claim large online tech companies would see an increase of only 16% over the same period.
This comes against a backdrop of a sector already in deep crisis. The letter highlights that pub closures have reached a new high and the industry has lost more than 100 breweries in the past year alone. Kate Nicholls, Chair of UKHospitality, echoed the sentiment, stating the government's manifesto promise to level the playing field between high streets and online giants is "quickly unravelling" and will deliver the opposite effect.
"These changes to business rates could be the difference between closure and survival for businesses that operate as the beating heart of communities," the brewers wrote in their letter to the Chancellor.
An Urgent Call for Government Action
The Society of Independent Brewers, representing around 700 beer producers, has called for immediate intervention. They are urging Rachel Reeves to either delay the property revaluations or significantly increase the business rates discount specifically for pubs.
Nicholls has previously warned that the combination of rising business rates, higher minimum wages, and increased duty will inevitably lead to one outcome: higher prices for consumers at the bar. The sector, described as fragile, is pleading for a policy correction to prevent further damage to community hubs across the nation.
The ball is now in the Treasury's court to decide whether to adjust its course and offer a lifeline to a quintessential British industry pleading for survival.
