BII calls on govt to reduce pub sales VAT to 10%

Steve Alton, CEO of the British Institute of Innkeeping (BII), has written to chancellor Rachel Reeves calling upon her to permanently reduce VAT on pub sales to 10% at the budget.

Alton said that this move would boost resilience, create jobs, enable investment and minimise price rises for consumers.

He also called on Reeves to deliver “permanent, real-terms” reductions in business rates bills from April 2026.

Lastly, he asked the chancellor to reverse recent NICs changes and introduce financial incentives for pubs hiring under-25s and those returning to work.

The BII claims that these changes would mean that 73% of pubs would increase investment, 60% would increase staff hours and 50% would increase their number of employees according to its member data.

The organisation stated that following last year’s budget, only one-in-three pubs is now profitable. It is also warning that 35% of the nations’ pubs risk closure without immediate intervention.

Despite strong trading throughout this year, 74% of operators have significantly reduced staff hours, while 70% have reduced their number of employees with licensees now covering the shortfall by working unsustainably long hours themselves.

Alton said: “Since the Covid pandemic, the Government has recognised the huge value of our pubs, with the prime minister recently stating that ‘When our locals do well, our economy does too. This recognition must now be matched with urgent action at the budget to drive local economic growth by reducing the unfair tax burden. This will create skilled jobs and allow pubs to continue to serve their communities. Without it, many simply will not survive.”

Representing over 13,500 members across the UK with the majority operating single independent pubs.