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UK pubs face collapse as tax hikes and insolvency rates soar to 20-year highs

Pubs are cutting hours and closing doors as taxes bite. Will the Autumn Budget deliver lifelines—or another blow to Britain’s struggling hospitality sector?

,   and  Administrator
2 min read
The picture is taken on the street of a city. In the center of the picture there are shops, tents,...
The picture is taken on the street of a city. In the center of the picture there are shops, tents, umbrellas, auto rickshaw, motor bike, people and many other objects. In the background there are buildings. In the foreground there are waste papers on the road.

UK pubs face collapse as tax hikes and insolvency rates soar to 20-year highs

The UK's hospitality industry, particularly pubs and bars, is grappling with significant challenges. A £25 billion increase in employer national insurance contributions, dubbed the 'Reeves Raid', is making it costly for these businesses to hire staff. Meanwhile, the number of struggling establishments seeking insolvency has reached a 20-year high. Simon Emeny, CEO of Fuller's, has expressed frustration and urged Chancellor Rachel Reeves to avoid further financial burdens in the upcoming Autumn Budget.

The impact of the national insurance hike and other rising costs has led many pubs to adopt shorter opening hours or reduce the number of days they operate. Emeny noted that this not only affects the businesses' profitability but also the Chancellor's revenue. He stated, 'If pubs are closing or are closed for longer hours, that's impacting the revenues that she gets.'

The Chancellor is reportedly considering another increase in alcohol duties, which industry figures fear could be the final nail in the coffin for many businesses. This proposal comes after Drug Commissioner Hendrik Streeck suggested raising alcohol prices as a means to reduce consumption. However, the industry argues that such measures would disproportionately affect moderate consumers and lower-income individuals, and instead advocates for balanced policies.

With the Autumn Budget approaching, the hospitality industry is calling for support rather than further taxation. Emeny has warned Reeves that 'we can't tax ourselves to victory' and has criticized the lack of a clear plan from the Labour party to stimulate economic growth. The industry hopes that the Chancellor will heed these concerns and provide relief to help struggling pubs and bars navigate the current economic climate.

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