5 days ago
Wetherspoons boss blasts Rachel Reeves' ‘ridiculous' tax raid, warning more pubs will shut
THE boss of Wetherspoons has blasted a planned Government tax raid, warning it could lead to less pubs on the high street.
Chairman of the major pub chain Tim Martin said a proposed shake-up of business rates by Rachel Reeves could lead to closures.
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The Telegraph reported the Chancellor will announce a hike in rates for larger premises, which could include pubs, in her next Budget, to the cost of £1.7billion.
Business rates are a tax paid by businesses on non-domestic properties like shops, restaurants and pubs.
But Sir Martin has warned the hike would pile pressure on pub bosses who are already tackling higher costs than supermarkets who don't have to pay VAT on food sales while pubs do.
Pub bosses were also hit with an increase in employer National Insurance contributions and the national minimum wage in April.
Sir Tim said: "Higher business rates will exacerbate the already ferocious tax disadvantage that pubs are currently labouring under, inevitably resulting in increased home consumption and less pubs."
The warning comes as the boss of Greene King calls for an overhaul of business rates for the sector as pub closures surge across the UK.
Nick Mackenzie, boss of the 1,500-strong pub firm, said reduced property tax payments were needed to drive investment and new jobs after swallowing recent cost hikes.
It comes days after figures from the British Beer and Pub Association (BBPA) pointed towards a surge in pub closures due to heightened financial pressures.
The body estimated that 378 pubs will close this year across England, Wales and Scotland after increased stress on the industry so far this year. It said this would amount to more than 5,600 direct job losses.
Industry bosses have said easing business rates could help support some pub businesses currently at threat of future closure.
Mr Mackenzie said the current system of business rates is 'unfair' on the sector, focusing on revenues rather than profitability, which has heavily diminished across pubs in recent years amid sharp increases in operating costs.
'Pubs are going to be around for the long term, but we need to address the unfairness in the system to allow them to flourish,' he said.
'It isn't fair that the sector has 0.4% of the rateable property but pay 2.1% of the bills.
'The sector is a massive employer and incredibly important for local communities, so we just feel it is important to underline how beneficial it is to tax pubs fairly."
The Sun asked the Treasury to comment.
