Taxes Killing The British Pub

Falling UK pub beer sales demonstrate the pressing need for a change in government beer tax policy, according to the British Beer and Pub Association (BBPA).

The BBPA's latest "Beer Barometer" shows that beer pub sales fell by 3.4% in 2011, with off trade sales down 3.7%. In addition, the year saw 9,000 job losses in the beer and pub sector. The figures have led the BBPA to urge the government to reconsider its tax policy, and to argue that changes could help create 5,000 jobs in 2012. BBPA figures show that beer sales support around 1m jobs and generate nearly GBP8bn (USD12.6bn) in tax revenues.

Beer duty was increased by 7.2% in Chancellor George Osborne's March 2011 Budget. The total increase in beer duty since March, 2008 stands at 35.4%. The BBPA maintains that the industry's decline could be halted - and thousands of jobs saved - if the government abandons what it believes are damaging plans for additional, above-inflation rises in beer tax in the March Budget. The government’s beer tax ‘escalator’ policy means increases of 2% above inflation until 2014/15.

Brigid Simmonds, Chief Executive of the BBPA, commented: “The decline in beer sales has slowed, but these figures show the sector cannot afford another round of inflation-busting, beer tax hikes in the Budget. This will delay any potential recovery in an iconic and economically vital British industry. A change of course, giving brewers and pubs a chance to invest and expand their operations, could create over five thousand jobs in 2012 which should be a great year for British beer and pubs with the Queen’s Jubilee, [the] Euro 2012 [soccer championships], the Olympics and Paralympics. These events could provide a real boost for the UK economy and boost employment - but this will only be possible if the government reverses planned tax increases and damaging over-regulation.”

Earlier this month, leading pub chain JD Wetherspoon joined the campaign to lower the rate of value-added tax (VAT) charged in pubs and restaurants from 20% to 5%. Releasing its latest interim figures, Wetherspoon argued the government must act on this as a priority, in order to maximise job creation and tax revenue. The chain argued that, with supermarkets not required to pay VAT on food, and with similar businesses in Ireland and France facing lower tax rates, the UK's pub and restaurant industry is at a disadvantage.

The VAT Club campaign is led by French lobbyist Jaques Borel, and big names including the British Hospitality Association, the British Association of Leisure Parks, Piers & Attractions, the Federation of Small Business and the Tourism Alliance are also involved.

Osborne will deliver his 2012 Budget on March 21.

via tax-news.com

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