Public Houses: Tax Allowances

The government recognises the important role that pubs play in supporting high streets and local communities.

At the Autumn Budget the Chancellor introduced a range of measures that support pubs. These included doubling the Employment Allowance to £10,500. This means more than half of businesses with NICs liabilities will either gain or will see no change this year.

The Chancellor also cut alcohol duty on qualifying draught products – approximately 60% of the alcoholic drinks sold in pubs. This represents an overall reduction in duty bills of over £85m a year and is equivalent to a 1p duty reduction on a typical pint. This reduction increased the relief available on draught products to 13.9%.

We intend to introduce permanently lower tax rates for retail, hospitality & leisure (RHL) properties with rateable values under £500,000, including those on the high street, from April 2026.

During the interim period, for 2025-26, RHL businesses will receive a 40 per cent relief on their business rates up to a cash cap of £110,000 per business, and the tax multiplier applied to small properties will be frozen. RHL relief was due to end entirely in April 2025. By extending it, the Government has saved the average pub, with a ratable value of £16,800, over £3,300.

There are no current plans to introduce a tax measure to support communities purchasing public houses, but the Government keeps all areas of the tax system under review. Any changes to the tax system are announced as part of the annual Budget process.