‘Stealth tax’ on Small companies will see hundreds of struggling village pubs hit with enterprise charges for the primary time

Thousands of struggling village pubs are set to be hit with business rates for the first time – amid claims that the sector is facing a new ‘stealth tax’.

Outrage is mounting after Chancellor Rachel Reeves promised lower tax rates for hospitality operators in the Budget – only for many publicans to discover their bills will rise sharply.

The anger has even prompted some landlords to ban Labour MPs from their pubs.

Analysis by tax advice firm Colliers shows that 3,157 smaller taverns, many vital to rural communities, have been dragged into the tax net.

John Webber, head of ratings at Colliers, said: ‘The Government boasted about levelling up and permanently helping small businesses in the retail and hospitality sector, including pubs.

‘But over 3,000 small pubs, who previously were eligible for 100 per cent small business relief – and therefore who didn’t pay a penny in business rates – will now be facing a full liability.’

Stealth raid: Pub New analysis by tax advice firm Colliers reveals that 3,157 smaller taverns, many of which are vital to rural communities, will be hit with business rates for the first time

These pubs will also lose the Covid-era 40 per cent discount for retail, hospitality and leisure firms, as Labour is scrapping it next year.

Webber said: ‘It’s going to be an expensive time for many. No wonder MPs are being banned from pubs.

‘Unfortunately, it would appear they spend too much of their time in the House of Commons’ subsidised bar to understand what is happening in the real world.’

Admiral Taverns, which runs 1,600 community pubs across the UK, said 400 of its 800 smallest pubs will be forced to pay business rates. 

These include one pub which will see its bill rise to £13,000 a year compared to zero previously.

‘If ever there was a stealth tax, it’s that one,’ said Admiral’s boss Chris Jowsey.

Business rates are based on the notional rental value of a property, meaning High Street shops and pubs often pay more than online giants such as Amazon.

About 15,000 venues avoid the tax because their property values are too low.

But thousands of these will be forced to pay the levy from April next year as a review has seen these values reassessed.

This is because valuations are calculated based on a pub’s sales, which have risen as the price of a pint has increased since the last review almost a decade ago.

Jowsey said the tax, when it hits, ‘will be devastating’.