High taxes are making it increasingly difficult for pubs in London to survive, according to the British Beer and Pub Association (BBPA).
The group issued the warning after pub chain JD Wetherspoon revealed its tax bill exceeded £450m in the last financial year.
The company’s founder, Tim Martin, said the levies were “unsustainable” and claimed the tax disparity between pubs and supermarkets was making it difficult for pubs to compete.
BBPA communications manager Neil Williams said around 275 pubs in the London area were shut in 2010, creating a huge impact on jobs and the local economy.
Some 97,000 Londoners depend on beer and pubs for work, according to a report released by Oxford Economics
Williams said: “We are seeing a lot of pubs close in the capital, particularly community pubs. The VAT increase has meant further taxes on pubs and it is putting huge pressure on them.
“With the recession, the last thing the pubs needed was huge tax increases and the Government now wants further tax rises in March. It’s crippling pubs ability to survive.”
Some 97,000 Londoners depend on beer and pubs for work, according to a report released by Oxford Economics earlier this year. It also found the beer and pub trade to be worth £3.2bn to London’s economy every year.
However, Williams warned that without a rethink, more pubs and jobs could be lost. He said: “The hospitality sector is a huge employer in London, providing one million jobs nationwide, but in London especially.
“As pub numbers drop we have seen less jobs in the sector. In London it provides a lot of flexible employment, particularly for young people. The hospitality trade could help boost the economy as it comes out of recession.”
Pubs will be important during the Olympics next year as one of the first things tourists want to experience is Britain’s great pubs and beers, Williams added.
“We believe that the current level of tax levied on the pub industry is unsustainable and is directly leading to the closure of many pubs, which have become uncompetitive in relation to neighbouring countries and to supermarkets”
Tim Martin, founder, JD Wetherspoon
Williams was speaking after JD Wetherspoon revealed the breakdown of its tax bill for the year to July 24. Wetherspoon enjoyed record sales of £1.07bn, up 7.6 per cent on the previous year, although pre-tax profits dropped to £66.8m because of higher interest payments.
The pub chain paid £453.1m in taxes to the Government, consisting of £204.8m in VAT, excise duty of £120.2m, PAYE and National Insurance of £65.2m, property taxes of £41.7m and £21.2m of corporation tax.
Martin said: “We believe that the current level of tax levied on the pub industry is unsustainable and is directly leading to the closure of many pubs, which have become uncompetitive in relation to neighbouring countries and to supermarkets.”