In April 2025, the British Institute of Innkeeping (BII), representing over 13,000 independent pub operators, issued a call to the UK government for meaningful financial support in tax relief. The plea comes as pubs grapple with the cumulative impact of recent tax changes, including increased employer National Insurance Contributions (NICs), a higher National Minimum Wage (NMW), and reduced business rate relief.
Key Challenges Facing Pubs
A recent BII survey highlights the severity of the situation:
- 83% of pub operators plan to reduce staff hours and shifts.
- 63% anticipate cutting staff numbers through recruitment freezes or redundancies.
- 72% intend to decrease spending with suppliers, many of whom are local businesses.
These measures are a direct response to the financial strain imposed by the latest tax policies. Notably, the NMW has risen by 50% over the past five years, a cost borne entirely by employers. Additionally, operators now face over a 10% increase in NICs and more than double the previous business rates.
In addition to these challenges, pubs are contending with a reduction in business rates relief from 75% to 40%, significantly increasing operational costs for many. Statutory sick pay has also risen to £118.75, further compounding the financial burden. In the hospitality industry, payroll costs rose by 10.8% nationally and by 12.3% in London between December 2024 and January 2025, highlighting the escalating expense of running a pub.
Calls for Government Action
Steve Alton, CEO of the BII, emphasises the urgency of the situation: “Brilliant operators… are being pushed to the brink, despite running vital and viable businesses.”
The BII advocates for a meaningful reduction in VAT as a top priority, with over 70% of surveyed members supporting this measure to alleviate the tax burden.
Conclusion
The BII’s call to action underscores the need for immediate government intervention to support the pub industry. Without relief measures, many pubs risk closure, leading to job losses, diminished local economies, and the erosion of vital community spaces.
